Australia Government Consolidated Financial Statements 2015

Commonwealth of Australia
CON SOLIDA TED FIN A N CIA L STA TEM EN TS

FOR TH E YEA R EN DED 30 JUN E 2015
CIRCULATED BY
SENATOR THE HONOURABLE MATHIAS CORMANN
MINISTER FOR FINANCE
OF THE COMMONWEALTH OF AUSTRALIA
DECEMBER 2015
Commonwealth of Australia 2015
ISSN 2205-9008 (print)
2205-9016 (online)
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CONTENTS
PREFACE ......................................................................................................... 1
COMMENTARY ON THE FINANCIAL STATEMENTS ................................................. 3

Introduction .................................................................................................................... 5
Discussion and analysis ................................................................................................ 7
CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE AUSTRALIAN

GOVERNMENT (WHOLE OF GOVERNMENT) AND GENERAL GOVERNMENT
SECTOR FINANCIAL REPORTS......................................................................... 33
Independent audit report ............................................................................................. 35
Statement of compliance ............................................................................................. 38
Australian Government operating statement .............................................................. 39
Australian Government balance sheet ........................................................................ 41
Australian Government cash flow statement .............................................................. 42
Australian Government statement of changes in equity ............................................. 43
SECTOR STATEMENTS .................................................................................... 45

Australian Government operating statement by sector
including General Government Sector Financial Report ........................... 47
Australian Government balance sheet by sector
Australian Government cash flow statement by sector
Australian Government statement of changes in equity
General Government Sector ..................................................................... 54
NOTES TO THE FINANCIAL STATEMENTS .......................................................... 55
iii
PREFACE
I am pleased to present the Consolidated Financial Statements (CFS) for the Australian
Government for the financial year ended 30 June 2015. The CFS presents the whole of
government and general government sector (GGS) financial reports. It consolidates the
audited accounts of 184 entities across the public sector.
The CFS has been prepared in accordance with the regulations of the Public Governance,
Performance and Accountability Act 2013 (the PGPA Act) and applicable Australian
Accounting Standards (AAS), including the requirements of AASB 1049 Whole of
Government and General Government Sector Financial Reporting (AASB 1049). The CFS
shows the results of the Australian Governments financial performance and cash
flows for the year ended 30 June 2015 and the Australian Governments financial
position as at 30 June 2015.
The Preface and the Commentary should be read in light of the information and
explanations provided in the CFS.
Fiscal balance
The Australian Government fiscal balance for the year ended 30 June 2015 was a deficit
of $46.5 billion. For the year ended 30 June 2014, the Australian Government reported
a fiscal balance deficit of $43.3 billion.
Australian Government taxation revenue increased by $6.7 billion (1.9 per cent) in
2014-15, reflecting an increase in taxes from individuals, customs duty and sales, offset
by a decrease in carbon price revenue, company tax and excise duty. Non-taxation
revenue increased by $2.7 billion (8.8 per cent).
Australian Government expenses increased by $15.9 billion (3.8 per cent) in 2014-15.
This was mainly driven by an $8.7 billion increase in current and capital transfers, a
$5.3 billion increase in operating expenses, a $1.2 billion increase in interest expenses
and a $0.8 billion increase in superannuation interest expenses.
The increase in current and capital transfers was due largely to an increase of
$5.5 billion in current and capital grants and $4.0 billion in personal benefits, partially
offset by a $0.9 billion decrease in subsidy expenses.
Within operating expenses, supply of goods and services increased by $4.6 billion,
depreciation and amortisation increased by $0.7 billion, and superannuation expenses
increased by $0.4 billion, partially offset by smaller movements in other line items.
In addition, the Australian Governments net acquisition of non-financial assets

decreased by $3.4 billion.
1
Preface
Balance sheet
The Australian Governments net worth was negative $309.0 billion at 30 June 2015. As
at 30 June 2014, the Australian Governments net worth was negative $264.7 billion.
The Australian Governments financial assets increased by $34.6 billion (9.8 per cent)
in 2014-15. Total non-financial assets increased by $8.7 billion (6.3 per cent).
The Australian Governments liabilities increased by $87.5 billion (11.6 per cent) to
$841.3 billion. The increase is primarily as a result of an increase in interest bearing
liabilities of $57.9 billion (14.6 per cent) which includes a $57.4 billion increase in the
value of Australian Government Securities. Provisions and payables increased by
$29.6 billion (8.3 per cent) mainly due to an increase in the superannuation liability of
$26.6 billion.
Cash flow
The Australian Government recorded a cash deficit of $37.6 billion in 2014-15 from
operating activities and investing activities in non-financial assets. The closing cash
position was $4.8 billion.
Contingent liabilities, contingent assets and risks

Contingent liabilities and contingent assets for the Australian Government are not
disclosed in the balance sheet but are set out in detail in Note 12A. Analysis of interest
rate, foreign currency, default and other risks that could potentially impact on the
Australian Governments financial position is included in Note 12B.
Final Budget Outcome

Under the Charter of Budget Honesty Act 1998 (the Charter), the Australian Government
is also required to publicly release and table a Final Budget Outcome (FBO) report no
later than three months after the end of the financial year. The FBO for the
2014-15 financial year was released by the Treasurer and I on 21 September 2015. The
FBO is unaudited but is derived from materially audit-cleared financial statements.
Under the Charter, the FBO must be based on external reporting standards; including
AAS and the concepts and classifications set out in Government Finance
Statistics (GFS), with any departures from those standards to be documented.
I would like to thank the many Australian Government employees whose efforts have
contributed to the completion of the 2014-15 CFS.
Senator the Hon Mathias Cormann

Minister for Finance
2
COMMENTARY ON THE FINANCIAL STATEMENTS
Commentary on the financial statements
INTRODUCTION
The 2014-15 Consolidated Financial Statements (CFS) for the Australian Government
are required by section 48 of the Public Governance, Performance and Accountability
Act 2013 (PGPA Act) 1. The CFS present the whole of government and general
government sector (GGS) financial reports and are prepared in accordance with
AASB 1049 Whole of Government and General Government Sector Financial Reporting
(AASB 1049).
The financial report includes consolidated results for all Australian Government
controlled entities as well as disaggregated information on the sectors of government
(GGS, public non-financial corporations (PNFC) and public financial corporations
(PFC) sectors). 2 The institutional structure of the public sector is explained in Note 1.
Note 16 provides the list of Australian Government controlled reporting entities,
including their sectoral classification.
AT A GLANCE
Table 1: Financial results for the year ended 30 June (2010-11 to 2014-15)
2010-11 2011-12 2012-13 2013-14 2014-15
$b $b $b $b $b
Revenue 322.3 350.4 370.4 378.9 388.2
Expenses 368.0 389.8 393.9 413.1 429.0
Net capital investment 6.7 6.9 4.5 9.0 5.6
Fiscal balance (52.4) (46.3) (28.0) (43.3) (46.5)
Total assets 377.0 390.6 430.9 489.0 532.3
Total liabilities 480.2 647.4 641.4 753.8 841.3
Net worth (103.1) (256.9) (210.5) (264.7) (309.0)
Operating activities (33.7) (29.6) (10.3) (27.5) (24.9)
Investing activities in non-financial assets (11.5) (12.5) (9.2) (12.5) (12.7)
Cash surplus/(deficit) (45.2) (42.1) (19.5) (40.0) (37.6)
1 The Financial Management and Accountability Act 1997 was replaced by the PGPA Act on
1 July 2014.
2 Unless explicitly stated, the financial results reported in this commentary comprise
consolidated amounts for the Australian Government as a whole, inclusive of the GGS,
PNFC and PFC sectors. The balances and movements detailed in the commentary have been
rounded to the nearest tenth of a billion. Discrepancies between totals and sums of
components are due to rounding.
5
The Australian Government financial results for 2014-15 were as follows:
The fiscal balance result for the year to 30 June 2015 was a deficit of
$46.5 billion. For the year ended 30 June 2014, the Australian Government
reported a fiscal balance deficit of $43.3 billion. 3
Total revenues for 2014-15 were $388.2 billion, an increase of $9.3 billion
(2.5 per cent) compared to 2013-14.
Total expenses for 2014-15 were $429.0 billion, an increase of $15.9 billion
(3.8 per cent) compared to 2013-14.
Net acquisition of non-financial assets for 2014-15 were $5.6 billion, a decrease
of $3.4 billion (37.8 per cent) compared to 2013-14.
The Australian Governments closing net worth position was negative

$309.0 billion at 30 June 2015, a decrease of $44.3 billion since 30 June 2014.
Total assets increased by $43.3 billion (8.9 per cent) since 30 June 2014 to
$532.3 billion at 30 June 2015.
Total liabilities increased by $87.5 billion (11.6 per cent) since 30 June 2014 to
$841.3 billion at 30 June 2015.
The cash deficit was $37.6 billion, a decrease of $2.4 billion (6.0 per cent)
compared to 2013-14.
3 The 2013-14 CFS fiscal balance deficit of $42.2 billion was $1.1 billion less than the 2013-14
restated deficit balance of $43.3 billion, due to prior year adjustments to tax related items and
the treatment of Medibank Private Limited as a discontinued operation. Refer to Notes 1 and
2 to the 2014-15 CFS for further information.
6
DISCUSSION AND ANALYSIS

Operating statement
Table 2: Operating statement
2014-15 2013-14 Change Change
$b $b $b %
Revenue 388.2 378.9 9.3 2.5
Expenses 429.0 413.1 15.9 3.8
Net operating balance (40.8) (34.2) (6.6) 19.3
Less Net acquisitions of non-financial assets 5.6 9.0 (3.4) (37.8)
Australian Government fiscal balance (46.5) (43.3) (3.2) 7.4
The fiscal balance for the year to 30 June 2015 was a deficit of $46.5 billion. For the year
ended 30 June 2014, the Australian Government reported a fiscal balance deficit of
$43.3 billion.
The decrease in the fiscal balance between 2013-14 and 2014-15 reflects an increase in
total expenses of $15.9 billion, partially offset by an increase in total revenues of
$9.3 billion and a decrease in the net acquisition of non-financial assets of $3.4 billion.
The increase in expenses was largely due to an increase in the supply of goods and
services, an increase in grants and the growth in direct personal benefits.
The increase in revenues was primarily due to an increase in taxation revenue flowing
from the modest growth in employment and wage income.
The decrease in the acquisition of non-financial assets primarily reflects the sale of
digital dividend spectrum licensing which commenced in 2014-15.
7
Chart 1 provides a comparison of the Australian Governments consolidated fiscal

balance since 2007-08.
4
Chart 1: Consolidated fiscal balance
$billion $billion
30 30
10 10
-10 -10
-30 -30
-50 -50
-70 -70
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Chart 2 provides a trend of the Australian Governments consolidated revenues and

expenses since 2007-08.
Chart 2: Revenue and expenses

$billion $billion
450 450
400 400
350 350
300 300
Expenses Revenue
250 250
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
4 The reporting of consolidated fiscal balance commenced in 2008-09 when the CFS were
prepared in accordance with the whole of government requirements of AASB 1049 for the
first time. The 2007-08 results were restated consistent with this standard in the 2008-09 CFS.
8
Australian Government revenue

The Australian Governments revenue increased by $9.3 billion (2.5 per cent) in
2014-15 to $388.2 billion.
Table 3: Revenue
$b $b $b %
Taxation revenue 354.9 348.2 6.7 1.9
Non-taxation revenue 33.3 30.6 2.7 8.7
Total revenue 388.2 378.9 9.3 2.5
Chart 3 shows the composition of revenue since 2007-08.
Chart 3: Composition of revenue

$billion $billion
400 400
350 350
300 300
250 250
200 200
150 150
100 100
50 50
0 0
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Tax ation r evenue Non- tax ation r evenue
9
Taxation revenue
The Australian Government total taxation revenue for the year ended on 30 June 2015
was $354.9 billion. The composition of taxation revenue is shown in Chart 4 below.
Chart 4: Composition of taxation revenue
Customs duty
Sales taxes 3%
Company tax 16%
19%
Excise duty
7%
Other*
4%
Individuals and other

withholding taxation
51%
*Other includes superannuation funds ($5.9 billion), fringe benefits tax ($4.4 billion), other indirect taxation
($3.8 billion) and resource rent tax ($1.4 billion).
Table 4: Australian Government taxation revenue

$b $b $b %
Income taxation
Individuals and other withholding taxation 181.2 167.2 14.0 8.4
Company tax 65.9 68.5 (2.6) (3.8)
Fringe benefits tax 4.4 4.3 0.1 2.3
Superannuation funds 5.9 6.1 (0.2) (3.3)
Resource rent taxes 1.4 1.8 (0.4) (22.2)
Total income taxation 258.8 247.9 10.9 4.4
Sales taxes 57.8 56.8 1.0 1.8
Excise duty 23.7 25.6 (1.9) (7.4)
Customs duty 10.9 9.3 1.6 17.2
Carbon pricing mechanism 0.0 4.7 (4.7) (100.0)
Other - indirect taxation 3.8 3.8 0.0 0.0
Total taxation revenue 354.9 348.2 6.7 1.9
10
Taxation revenue increased by $6.7 billion (1.9 per cent) to $354.9 billion. The key
movements in taxation revenue from 2013-14 to 2014-15 were:
an increase of $14.0 billion (8.4 per cent) from individuals and other withholding
taxation. The growth in individuals and other withholding taxation is broadly
consistent with conditions in the labour market;
a decrease of $4.7 billion (100.0 per cent) in the carbon pricing mechanism as a
result of the carbon tax being repealed;
a decrease of $2.6 billion (3.8 per cent) from company tax. This was due to weaker
corporate profitability, as well as lower commodity prices affecting the mining
sector;
a decrease in excise duty of $1.9 billion (7.4 per cent) and a corresponding increase
in customs duty of $1.6 billion (17.2 per cent) as a result of a greater share of
tobacco products being cleared through Customs; and
an increase of $1.0 billion (1.8 per cent) in sales taxes, with the main contributor
being a $0.9 billion increase in goods and services tax (GST), consistent with
growth in consumption subject to GST.
Non-taxation revenue
The Australian Governments total non-taxation revenue for the year ended on
30 June 2015 was $33.3 billion. The composition of non-taxation revenue is shown in
Chart 5 below.
Chart 5: Composition of non-taxation revenue
11
Table 5: Non-taxation revenue

$b $b $b %
Sales of goods and services 17.9 16.9 1.0 5.9
Interest income 4.5 4.4 0.1 2.3
Dividend income 3.9 2.5 1.4 56.0
Other 7.0 6.9 0.1 1.4
Total non-taxation revenue 33.3 30.6 2.7 8.7
Total non-taxation revenue increased by $2.7 billion (8.7 per cent) to $33.3 billion. The
key movements in non-taxation revenue from 2013-14 to 2014-15 were as follows:
an increase of $1.0 billion in sales of goods and services revenue mainly associated
with:
an increase of $0.6 billion in services revenue from public corporations,
including the Australian Submarine Corporation Pty Ltd ($0.2 billion), the
Reserve Bank of Australia (RBA) ($0.2 billion) and National Broadband
Network Co Ltd (NBN) ($0.1 billion);
a decrease of $0.3 billion due to the winding down of the Guarantee Scheme
for Large Deposits and Wholesale Funding fees by the Department of the
Treasury (the Treasury); and
an increase of $0.2 billion in visa application fee revenue due to increased visa
activity levels.
an increase of $1.4 billion in dividend income, primarily from the Future Fund
investment portfolio.
an increase of $0.1 billion in interest income, including an increase of $0.3 billion

in interest from Australian dollar investments held by the RBA; partially offset by
a $0.1 billion decrease in interest from the Future Fund investment portfolio and a
$0.1 billion decrease in interest from residential mortgage-backed securities
investments held by the Australian Office of Financial Management (AOFM).
an increase of $0.1 billion in other revenue including:

a decrease in offshore petroleum royalties and uranium royalties of $0.4 billion
due to changes in production volume, price and exchange rates;
an increase of $0.3 billion in resources received free of charge primarily due to
increased demand for the National Disability Insurance Scheme services; and
an increase of $0.2 billion in other non-tax revenue across a range of entities.
12
Australian Government expenses

Chart 6 below shows the composition and the trend for expenses since 2007-08.
Chart 6: Expenses
$billion $billion
450 450
400 400
350 350
300 300
250 250
200 200
150 150
100 100
50 50
0 0
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Current and capital transfers Gross operating Interest
The Australian Governments total expenses for the year ended on 30 June 2015 were
$429.0 billion. The composition of expenses is shown in Chart 7 below.
Chart 7: Breakdown of expenses
13
Table 6: Expenses
$b $b $b %
Gross operating 127.9 122.6 5.3 4.3
Interest 25.8 23.9 2.0 8.2
Current and capital transfers
Grants 133.8 128.3 5.5 4.3
Personal benefits 129.2 125.2 4.0 3.2
Subsidies 12.3 13.2 (0.9) (6.5)
Total current and capital transfers 275.4 266.7 8.7 3.2
Total expenses 429.0 413.1 15.9 3.8
The Australian Governments total expenses increased by $15.9 billion (3.8 per cent) in
comparison to 2013-14.
Current and capital transfers increased by $8.7 billion (3.2 per cent) to $275.4 billion.
The key changes in current and capital transfers from 2013-14 to 2014-15 were as
follows:
an increase of $5.5 billion in current and capital grants. The primary contributors
to the increase included:
an increase of $5.8 billion in grants to state and territory governments, which
includes increases in: government and non-government schools national
support ($3.6 billion); general revenue assistance ($3.0 billion); financial
assistance grants for local governments ($2.3 billion); and assistance to the
states for healthcare services ($1.6 billion). These amounts were partially offset
by decreases in: state government school assistance payments ($2.1 billion); rail
transport ($0.9 billion); road transport ($0.8 billion); public hospital services
($0.8 billion); government schools ($0.3 billion) and aged care assistance
($0.3 billion);
an increase of $1.2 billion in grants to non-profit institutions, which includes
increases in: home support ($0.9 billion); Indigenous jobs, land and economy
($0.5 billion); and the National Disability Insurance Scheme ($0.5 billion).
These amounts were partially offset by decreases to: services and support for
people with a disability ($0.3 billion); education, wellbeing and community
safety ($0.2 billion) and targeted community care ($0.2 billion);
a decrease of $0.8 billion in grants to the private sector, which includes
decreases in: home support ($0.5 billion); industry development and
investment ($0.3 billion); and other energy related initiatives and management
($0.3 billion). These amounts were partially offset by an increase in
encouraging investment ($0.2 billion); and
a decrease of $0.6 billion in mutually agreed write-downs, primarily penalty
and interest charge remissions by the Australian Taxation Office.
14
an increase of $4.0 billion in personal benefits expense. This includes increases in:
the age pension ($2.2 billion); child care benefits ($1.2 billion); and student
payments ($0.8 billion).
a decrease of $0.9 billion in subsidy expenses primarily as a result of the repeal of

the carbon tax ($1.2 billion), partially offset by increases for the fuel tax credit
scheme ($0.3 billion) and stronger uptake of the research and development tax
incentive ($0.2 billion).
Gross operating expenses increased by $5.3 billion (4.3 per cent) to $127.9 billion. The
key changes in gross operating expenses from 2013-14 to 2014-15 were as follows:
the supply of goods and services expense increased by $4.6 billion, including
increases in: Defence related expenditure ($1.0 billion); Medicare services
($0.9 billion); child care rebate ($0.8 billion); residential and flexible care
($0.8 billion); disability and carers ($0.7 billion); dental services ($0.3 billion), and
public corporations, including Australia Post ($0.2 billion) and NBN ($0.2 billion).
These increases were partially offset by a $0.5 billion decrease, which was driven
by the closure of several detention centres.
depreciation and amortisation expenses increased by $0.7 billion consistent with

the increase in non-financial assets.
the current service cost of the Australian Governments unfunded superannuation

provisions increased by $0.4 billion. The current service cost recognises the
increase in the superannuation liability that results from employee service in the
reporting period. As the calculation of the amount is based on a present value, it
is sensitive to changes in the discount rate used for the calculation. 5 The longer the
length of service, the greater the impact of discount rate changes.
Interest (excluding superannuation interest) expenses increased by $1.2 billion

(7.5 per cent) during 2014-15 to $16.8 billion as a result of an increased volume of
Australian Government Securities on issue for the year. Superannuation interest
expenses increased by $0.8 billion (9.6 per cent) during 2014-15 to $9.0 billion.
5 Under AASB 119 Employee Benefits, the expenses recognised in the operating statement,
including the current service cost and the nominal interest on superannuation, are
determined with reference to the yield on government bonds (discount rate) at the start of
the reporting period (4.1 per cent in 2014-15; 4.3 per cent in 2013-14), with the change in
interest rates reflected as an actuarial revaluation in other economic flows.
15
Chart 8 below provides a presentation of total expenses based on how the Australian
Government allocated resources across the range of policy areas. The chart highlights
the relative cost of each function for 2014-15 compared with the previous year.
Chart 8: Total expenses by function
Mining, manufacturing and construction
Agriculture, forestry and fishing
Recreation and culture
Public order and safety
Housing and community amenities
Fuel and energy
Other economic affairs
Transport and communication
Defence
General public services
Education
Health
Other purposes
Social security and welfare
0 20 40 60 80 100 120 140

$billion
2014-15 2013-14
Australian Government other economic flows

Table 7: Other economic flows
$b $b $b %
Net write-downs of assets (5.6) (6.6) 1.0 (14.6)
Revaluation of equity investments 0.4 0.3 0.1 35.8
Net foreign exchange gains/(losses) 3.8 (0.2) 4.1 (1,641.7)
Actuarial revaluation of superannuation (17.7) (13.0) (4.7) 36.2
Revaluations of non-financial assets 1.6 1.2 0.4 29.6
Net gains/(losses) from sale of assets 13.4 6.3 7.1 113.2
Other 0.4 (8.3) 8.7 (104.7)
Total other economic flows (3.7) (20.3) 16.6 (81.6)
The Australian Government reported a net loss of $3.7 billion in other economic flows
in 2014-15, a $16.6 billion change from 2013-14.
16
The $4.7 billion change in the actuarial revaluation of superannuation primarily relates
to discount rate changes. Under the accounting standards, the superannuation liability
is calculated using a discount rate based on current long-term government bond rates.
Movement in the discount rate can cause significant movements in the valuation of the
liability. In 2014-15, the discount rate decreased from 4.1 per cent to 3.7 per cent
(increasing the liability and reducing net worth). In 2013-14, the discount rate
decreased from 4.3 per cent to 4.1 per cent. The actuarial assumptions applied in the
calculation of the Australian Governments liability are detailed in Note 12C.
The major contributor to the $8.7 billion change in other relates to a one-off variation
in indexation arrangements for military superannuation in 2013-14 ($7.8 billion).
The $7.1 billion increase in net gains from sale of assets primarily relates to the sale of
Medibank Private ($4.3 billion) and the digital dividend from spectrum licensing
($2.0 billion) in 2014-15.
The $4.1 billion increase in net foreign exchange gains/(losses) relates largely to
$6.0 billion in gains for foreign currency held by the RBA, partially offset by
$2.1 billion in foreign exchange losses relating to the Future Fund investment portfolio.
Australian Government net acquisition of non-financial assets

Table 8: Net acquisition of non-financial assets
$b $b $b %
Purchases of non-financial assets 15.6 15.1 0.5 3.3
less Sale of non-financial assets 2.5 0.4 2.1 525.0
less Depreciation 8.1 7.4 0.7 9.5
plus Change in inventories and other movements 0.6 0.7 (0.1) (14.3)
plus Other movements in non-financial assets 0.0 1.0 (1.0) (100.0)
Total net acquisition of non-financial assets 5.6 9.0 (3.4) (37.8)
The Australian Governments net acquisition of non-financial assets showed a decrease

of $3.4 billion from last year to $5.6 billion in 2014-15. The increase in sale of
non-financial assets is reflective of proceeds from the sale of digital dividend spectrum
licensing which commenced in 2014-15 ($2.0 billion).
17
Balance sheet
The Australian Governments net worth decreased by $44.3 billion in 2014-15 to
produce a closing negative net worth of $309.0 billion.
Table 9: Balance sheet

$b $b $b %
Financial assets 386.3 351.8 34.6 9.8
Non-financial assets 146.0 137.3 8.7 6.3
Total assets 532.3 489.0 43.3 8.9
Interest bearing liabilities 455.5 397.6 57.9 14.6
Provisions and payables 385.8 356.2 29.6 8.3
Total liabilities 841.3 753.8 87.5 11.6
Net worth (309.0) (264.7) (44.3) 16.7
The decrease in net worth resulted from the $57.9 billion increase in interest bearing
liabilities and increase of $29.6 billion in provisions and payables (primarily relating to
superannuation), partially offset by an increase in financial assets of $34.6 billion and
non-financial assets of $8.7 billion.
Chart 9 shows the movement and composition of the Australian Governments

financial position since 2007-08.
Chart 9: Australian Government balance sheet

$billion $billion
600 600
500 500
400 400
300 300
200 200
100 100
0 0
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
-100 -100
-200 -200
-300 -300
-400 -400
-500 -500
-600 -600
-700 -700
-800 -800
-900 -900
Financial assets Non-financial assets Provisions and payables
Interest bearing liabilities Net worth
18
Australian Government assets

The Australian Governments total assets as at 30 June 2015 was $532.3 billion. The
composition of assets is shown in Chart 10 below.
Chart 10: Composition of assets
Included in the above categories are the following items:
Cash and Deposits Advances Paid are loans Investments, Loans and
Cash at bank and cash on made for policy purposes Placements
hand; rather than for liquidity Term deposits;
management, including:
Short-term deposits Investment debt securities
(generally less than Student loans (including (including Future Fund and
three months); and Higher Education Loan Government Funds);
Programme (HELP));
Fund deposits at call. International Monetary Fund
Loans to state and territory (IMF) quota; and
governments; and
Residential
Subscriptions to international mortgage-backed securities.
aid organisations.
Other receivables Equity investments constitute Non-financial assets
Statutory receivables and a financial claim on other Land, buildings, plant,
recoverables; and entities and include: infrastructure and
Trade debtors. Investments in public equipment, investment
corporations (valued using the property, heritage and
discounted cash flow method cultural assets, biological
or net assets); assets and assets held for
Future Fund equity holdings; sale are non-financial
and produced assets;
Investments in international Specialist military equipment;
financial institutions. Intangibles include software
and other produced
intangibles;
Inventories; and
Prepayments.
19
Table 10: Australian Governments assets

$b $b $b %
Financial assets
Cash and deposits 4.8 4.5 0.3 6.8
Advances paid 41.8 34.8 6.9 19.9
Other receivables and accrued revenue 41.2 42.2 (1.0) (2.3)
Investments, loans and placements 254.5 229.8 24.7 10.7
Equity investments 44.1 40.5 3.6 8.9
Total financial assets 386.3 351.8 34.6 9.8
Non-financial assets 146.0 137.3 8.7 6.3
Total assets 532.3 489.0 43.3 8.9
The Australian Governments total assets increased by $43.3 billion (8.9 per cent) since
30 June 2014.
This included a $34.6 billion (9.8 per cent) increase in financial assets to $386.3 billion at
30 June 2015, and a $8.7 billion (6.3 per cent) increase in non-financial assets to
$146.0 billion at 30 June 2015. This continues the trend of recent years where a greater
proportion of the Australian Governments assets held are financial assets.
The key movements in financial assets between 30 June 2014 and 30 June 2015 included
the following:
an increase of $24.7 billion in investments, loans and placements. This included a

$14.8 billion increase in Australian dollar securities and foreign exchange
holdings held by the RBA and an increase of $11.2 billion in non-equity
investments held by the Future Fund. These increases were partially offset by a
$1.8 billion decrease in residential mortgage-backed securities held by the AOFM;
an increase of $6.9 billion in advances paid, mainly due to a $5.3 billion increase in
the HELP scheme reflecting increased loan numbers; and
an increase of $3.6 billion in equity investments, primarily resulting from an

increased holding of listed equities and listed managed investment schemes by
the Future Fund.
The key movements in non-financial assets between 30 June 2014 and 30 June 2015
included the following:
an increase of $3.5 billion for infrastructure, plant and equipment including an

increase of $3.1 billion in network assets for the rollout of the NBN;
an increase of $1.5 billion for other non-financial assets, primarily driven by an

increase in Defence prepayments for foreign military sales;
an increase of $1.4 billion for specialist military equipment;
20
an increase of $0.9 billion for buildings primarily due to revaluations by Defence

and of overseas property purchases by the Department of Foreign Affairs and
Trade;
an increase in land of $0.6 billion mainly due to revaluations; and
an increase in heritage and cultural assets of $0.5 billion, mainly due to

revaluation of cultural institution collections.
Australian Government liabilities

The Australia Governments total liabilities were $841.3 billion as at 30 June 2015. The
composition of liabilities is shown in Chart 11 below.
Chart 11: Composition of liabilities
21
Included in the above categories are the following items:
Interest bearing liabilities Provisions Payables

Public debt (Treasury bonds, Australian Governments Trade creditors, capital
Treasury Notes and Treasury unfunded superannuation creditors and unsettled
Indexed Bonds); liability; investment purchases;
Bills of exchange and Annual leave, long service Amounts payable to grant
promissory notes issued to leave liabilities, accrued or subsidy recipients at
international multilateral salaries and wages, period-end;
organisations; separations and redundancies, Personal benefit
IMF Special Drawing Rights workers compensation payables at period-end;
allocation reflecting Australias provisions;
Unearned income and
cumulative liability to the IMF; Social security, health and prepayments received;
and education benefit provisions; and
Finance leases and other Grant provisions for university Unclaimed monies and
loans. superannuation, Natural outstanding claims.
Disaster Relief and Recovery
Arrangements and subsidy
provisions administered
through the tax system;
Provisions for asbestos,
decontamination, etc; and
Unearned income, unclaimed
monies, outstanding claims
and taxation refunds.
Table 11: Australian Governments liabilities

$b $b $b %
Interest bearing liabilities 455.5 397.6 57.9 14.6
Provisions and payables 385.8 356.2 29.6 8.3
Total liabilities 841.3 753.8 87.5 11.6
The Australian Governments liabilities have increased by $87.5 billion (11.6 per cent)
since 30 June 2014.
This included a $57.9 billion (14.6 per cent) increase in interest bearing liabilities to
$455.5 billion at 30 June 2015 and a $29.6 billion (8.3 per cent) increase in provisions
and payables to $385.8 billion at 30 June 2015.
The decrease in the bond rate was the main contributor to the overall increase in
provisions. A number of Australian Government provisions are long-term in nature
and, as such, are subject to variations if the discount rate used in calculating the
present value of these liabilities changes. The bond rate change was the key
determinant of the $26.6 billion increase in the Australian Governments unfunded
superannuation liabilities.
22
The increase of $57.9 billion in interest bearing liabilities includes:
an increase of $57.4 billion in the issuance volume and market value of Australian
Government Securities held by the AOFM;
a decrease of $1.6 billion in other interest bearing liabilities due to a decrease of

amounts outstanding under repurchase agreements by the RBA of $3.5 billion;
partially offset by an increase in swap principal payables by the RBA and Future
Fund of $1.2 billion, and an increase of $0.6 billion in the IMF allocation of Special
Drawing Rights to Treasury; and
an increase of $1.2 billion in loans, primarily bills of exchange and promissory

notes issued to the IMF by the Treasury.
The increase in provisions and payables of $29.6 billion included:
an increase of $26.6 billion in the superannuation liability resulting from actuarial

revaluations, in particular a 0.4 percentage point decrease in the Government
bond rate used to discount expected future superannuation payments;
an increase of $4.7 billion in Australian currency (notes) on issue;
an increase of $1.4 billion in other employee liabilities, mainly resulting from

actuarial adjustments to the provision for military workers compensation of
$1.2 billion; partially offset by
a decrease in other provisions of $2.3 billion, mainly driven by $1.8 billion for the
Natural Disaster Relief and Recovery Arrangements provision reflecting the close
out of projects in Queensland.
23
Statement of cash flows

Table 12: Cash flow
$b $b $b %
Cash receipts
Operating activities 385.8 369.5 16.3 4.4
Investing activities in non-financial assets 2.4 0.7 1.7 242.9
Financing activities 60.3 89.4 (29.1) (32.6)
Total cash receipts 448.5 459.6 (11.1) (2.4)
Cash payments
Operating activities 410.7 397.3 13.4 3.4
Investing activities in non-financial assets 15.1 13.2 1.9 14.4
Investing activities in financial assets 16.1 40.0 (23.9) (59.8)
Financing activities 6.4 9.0 (2.6) (28.9)
Total cash payments 448.3 459.5 (11.2) (2.4)
Net cash from discontinued activities 0.1 0.3 (0.2) (63.3)
Net movement in cash 0.3 0.4 (0.1) (25.0)
Cash at beginning of the year 4.5 4.1 0.4 9.8
Cash at end of year 4.8 4.5 0.3 6.7
Key fiscal aggregate
Operating activities (24.9) (27.5) 2.6 (9.5)
Investing activities in non-financial assets (12.7) (12.5) (0.2) 1.6
Cash surplus/(deficit) (37.6) (40.0) 2.4 (6.0)
The Australian Governments cash balance was $4.8 billion at 30 June 2015. In 2014-15
the Australian Government recorded a cash deficit of $37.6 billion, a decrease of
$2.4 billion compared to a cash deficit of $40.0 billion for 2013-14. 6
6 The cash deficit reported above differs to the deficit reported in the 2014-15 Final Budget
Outcome (FBO) as the above result is for the whole of government, including public
corporations whereas the FBO focuses on the outcome for the GGS. In addition, the
2014-15 FBO excludes Future Fund earnings and includes the net acquisition of assets
acquired under finance leases and similar arrangements.
24
Australian Government cash receipts and payments

The following charts provide a detailed break-down of Australian Government
receipts and payments for 2014-15, showing the relative composition of each dollar
received and each dollar paid.
Chart 12: Composition of each dollar of cash received in 2014-15
Taxes: $351.6 billion (2013-14: $338.2 billion)

(78 cents of every dollar received in 2014-15, 74 cents in
2013-14)
Borrowing and $62.7 billion (2013-14: $90.2 billion)

investment: (14 cents of every dollar received in 2014-15, 19 cents in
2013-14)
Sales of goods and $18.5 billion (2013-14: $17.7 billion)

services: (4 cents of every dollar received in 2014-15, 4 cents in 2013-14)
Interest and dividends: $8.2 billion (2013-14: $6.4 billion)

(2 cents of every dollar received in 2014-15, 1 cent in 2013-14)
Other: $7.5 billion (2013-14: $7.1 billion)

(2 cents of every dollar received in 2014-15, 2 cents in 2013-14)
Taxation receipts remain the predominant source of Australian Government receipts

with 78 cents of every dollar that the Australian Government receives resulting from
tax collections in 2014-15.
25
Chart 13: Composition of each dollar of cash paid in 2014-15
Grants and subsidies: $144.4 billion (2013-14: $140.1 billion)

(32 cents of every dollar paid in 2014-15, 32 cents in 2013-14)
Personal benefits: $130.9 billion (2013-14: $126.4 billion)

Payments for goods and $85.0 billion (2013-14: $79.8 billion)

services: (19 cents of every dollar paid in 2014-15, 17 cents in 2013-14)
Payments for employees $36.0 billion (2013-14: $36.8 billion)

and other: (9 cents of every dollar paid in 2014-15, 8 cents in 2013-14)
Financing and investing $22.5 billion (2013-14: $48.9 billion)

activities: (5 cents of every dollar paid in 2014-15, 11 cents in 2013-14)
Purchases of $15.1 billion (2013-14: $13.2 billion)

non-financial assets: (3 cents of every dollar paid in 2014-15, 3 cents in 2013-14)
Interest paid: $14.4 billion (2013-14: $14.3 billion)

Grants and subsidies, personal benefits and payments for the supply of goods and
services are the main items of expenditure for the government, comprising 80 per cent
of all payments.
26
Chart 14 provides a trend of the Australian Governments cash receipts and cash
payments for operating activities and purchases/sales of non-financial assets since
2007-08.
Chart 14: Receipts and payments operating and non-financial assets

$billion $billion
450 450
400 400
350 350
300 300
250 250
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Payments Receipts
Future commitments
Table 13: Australian Government future commitments
$b $b $b %
Capital commitments 38.8 28.4 10.4 36.5
Other commitments
Operating leases 18.9 19.4 (0.5) (2.5)
Grant commitments 109.2 101.5 7.7 7.6
Other commitments 52.7 43.2 9.5 22.1
Total other commitments 180.8 164.1 16.7 10.2
Total commitments 219.6 192.5 27.1 14.1
less Commitments receivable 2.1 4.8 (2.7) (56.2)
Net commitments 217.5 187.7 29.8 15.9
The Australian Government is committed to future capital expenditure of $38.8 billion

as at 30 June 2015, an increase of $10.4 billion since 2013-14. The change is primarily in
relation to increases in various collective investment vehicles held by the Future Fund,
specialist military equipment, and infrastructure, plant and equipment.
Total other commitments increased by $16.7 billion, as a result of an increase in other

commitments of $9.5 billion, primarily due to employment programme commitments,
and grant commitments of $7.7 billion, mostly related to education funding
commitments.
27
Contingent liabilities
Contingent liabilities are associated with events that are considered possible but not
sufficiently probable (or quantifiable) that they should be included in the balance
sheet. The Australian Government includes those contingent liabilities that were
quantifiable in accordance with accounting standards.
Table 14: Australian Government contingent liabilities

$b $b $b %
Quantifiable contingent liabilities
Guarantees 18.0 16.6 1.4 8.3
Indemnities 0.3 0.3 (0.0) (5.1)
Uncalled shares/capital subscriptions 15.6 13.5 2.1 15.5
Claims for damages/costs 0.2 0.2 (0.0) (16.6)
Other contingencies 259.9 5.4 254.5 4,676.3
Total quantifiable contingent liabilities 294.0 36.1 257.9 715.1
The Australian Government disclosed a total of $294.0 billion in quantifiable

contingent liabilities as at 30 June 2015.
Other contingencies increased by $254.5 billion, primarily as a result of the RBA

providing a Committed Liquidity Facility (CLF) to eligible authorised deposit-taking
institutions (ADIs) as part of Australias implementation of the Basel III liquidity
requirements. The CLF provides ADIs with a contractual commitment to funding
under repurchase agreements with the RBA, subject to certain conditions.
The total of uncalled shares and capital subscriptions included $15.5 billion
(2014: $13.4 billion) associated with the European Bank for Reconstruction and
Development, the International Bank for Reconstruction and Development, the
Multilateral Investment Guarantee Agency and the Asian Development Bank.
28
APPENDIX A
Historical information
The following table presents the key financial results for the Australian Government from the 2007-08 financial year. 7
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
$b $b $b $b $b $b $b $b
OPERATING STATEMENT
Revenue from transactions
Taxation revenue 286.0 278.3 268.0 288.8 316.5 334.4 348.2 354.9
Non-taxation revenue 29.1 31.5 30.9 33.5 33.9 36.0 30.6 33.3
Total revenue 315.1 309.8 298.9 322.3 350.4 370.4 378.9 388.2
Expenses from transactions
Gross operating expenses 88.3 95.9 103.6 110.9 119.4 124.6 122.6 127.9
Current and capital transfers 189.3 225.7 232.5 238.4 249.3 248.6 266.7 275.4
Superannuation interest expense 6.0 6.7 6.7 7.0 7.4 6.7 8.2 9.0
29
Interest expenses 5.9 6.4 7.9 11.7 13.8 14.0 15.6 16.8
Total expenses 289.5 334.8 350.7 368.0 389.8 393.9 413.1 429.0
Net operating balance 25.6 (25.0) (51.8) (45.7) (39.4) (23.4) (34.3) (40.8)
Net acquisition of
3.3 5.0 7.6 6.7 6.9 4.5 9.0 5.6
non-financial assets
Fiscal balance 22.3 (30.0) (59.4) (52.4) (46.3) (28.0) (43.3) (46.5)
7 Key financial results have been presented from 2007-08 following the introduction of the AASB 1049. The 2007-08 outcome was restated consistent
with this standard in the 2008-09 CFS.
Notes to the financial statements
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
$b $b $b $b $b $b $b $b
BALANCE SHEET
Assets
Financial assets 244.1 266.9 268.3 261.7 268.2 303.1 351.8 386.3
Non-financial assets 95.2 100.3 109.0 115.3 122.4 127.8 137.3 146.0
Total assets 339.2 367.2 377.2 377.0 390.6 430.9 489.0 532.3
Liabilities
Interest bearing liabilities 86.2 124.2 183.8 222.0 287.7 315.4 397.6 455.5
Provisions and payables 185.4 227.5 247.4 258.2 359.8 325.9 356.2 385.8
Total liabilities 271.5 351.7 431.2 480.2 647.4 641.4 753.8 841.3
Net worth 67.7 15.5 (53.9) (103.1) (256.9) (210.5) (264.7) (309.0)
CASHFLOW STATEMENT
Operating activities 32.6 (12.7) (44.3) (33.7) (29.6) (10.3) (27.5) (24.9)
Investing activities in
(8.0) (10.2) (12.5) (11.5) (12.5) (9.2) (12.5) (12.7)
30
Investing activities in
(43.8) (26.7) 6.4 (0.9) (6.9) (13.7) (40.0) (16.1)
financial assets
Financing activities 18.9 49.4 51.9 46.0 47.5 33.2 80.5 53.9
Net movement in cash (0.3) (0.2) 1.6 (0.1) (1.4) 0.0 0.4 0.3
Commentary on the Financial Statements
APPENDIX B
LINKS TO OTHER PUBLICATIONS PUBLISHED BY THE AUSTRALIAN
GOVERNMENT ABOUT ITS PROJECTED AND ACTUAL FINANCIAL
POSITION FOR THE 2014-15 FINANCIAL YEAR
The Australian Government publishes a range of information about its projected and
actual financial position. Links to some of these documents are set out below. The
information in the following documents has been prepared for different purposes and
therefore does not form part of the CFS. Further, the documents listed below are not
subject to audit.
2014-15 Final Budget Outcome

The 2014-15 Final Budget Outcome (FBO) was prepared in a manner consistent with
the Charter of Budget Honesty Act 1998 (the Charter). The Charter requires that,
inter alia, the Government provide the FBO no later than three months after the end of
the financial year. Consistent with these requirements, the FBO encompasses
Australian Government GGS fiscal outcomes for the 2014-15 financial year and is
based on external reporting standards.
The FBO is available on the Australian Government website at:

http://www.budget.gov.au/2014-15/content/fbo/html/index.htm.
Australian Government (GGS) Monthly Financial Statements

The Australian Government (GGS) Monthly Financial Statements are prepared on a
basis consistent with the Budget as required under section 47 of the PGPA Act. The
statements are prepared in accordance with AASB 1049.
The Australian Government Monthly Financial Statements are available on the

Department of Finance website and the Minister for Finance website at:
http://www.finance.gov.au/publications/commonwealth-monthly-financial-stateme
nts/; and
http://www.financeminister.gov.au/media/2015/index.html.
Budget Strategy and Outlook and Mid-Year Economic and Fiscal Outlook
The Budget Strategy and Outlook Budget Paper 2014-15, the Mid-Year Economic and
Fiscal Outlook 2014-15 and the Budget Strategy and Outlook Budget Paper 2015-16
have been prepared in accordance with the Charter.
The aforementioned Budget Papers are available on the Australian Government

website at http://www.budget.gov.au/.
31
Commentary on the Financial Statements
Tax Expenditures Statement 2014

The Tax Expenditures Statement (TES) provides details of concessions, benefits,
incentives and charges provided through the tax system (tax expenditures) to taxpayers
by the Australian Government. The TES is available on the Treasury website at:
http://www.treasury.gov.au/PublicationsAndMedia/Publications/2015/TES-2014.
32
CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING
THE AUSTRALIAN GOVERNMENT (WHOLE OF
GOVERNMENT) AND GENERAL GOVERNMENT SECTOR
FINANCIAL REPORTS
INDEPENDENT AUDIT REPORT
35
Consolidated financial statements
36
37
38
Australian Government operating statement

for the year ended 30 June 2015
2015 2014
Note $m $m
Taxation revenue 3A 354,910 348,232
Sales of goods and services 3B 17,901 16,904
Interest income 3C 4,499 4,406
Dividend income 3C 3,927 2,457
Other 3D 6,966 6,855
Total revenue 388,203 378,854
Gross operating expenses
Wages and salaries 4A 22,282 22,519
Superannuation 4A 7,324 6,893
Depreciation and amortisation 4B 8,099 7,375
Supply of goods and services 4C 83,310 78,756
Other operating expenses 4A 6,838 7,010
Total gross operating expenses 127,853 122,553
Superannuation interest expense 4A 8,999 8,214
Interest expense 4D 16,816 15,646
Current transfers
Current grants 4E 124,567 115,910
Subsidy expenses 12,344 13,197
Personal benefits 129,190 125,184
Total current transfers 266,101 254,291
Capital transfers
Mutually agreed write-downs 4E 1,857 2,477
Other capital grants 4E 7,398 9,932
Total capital transfers 9,255 12,409
Total expenses 4F 429,024 413,113
Net operating balance (40,821) (34,259)
Other economic flows - included in Operating Result
Net write-downs of assets (including bad and doubtful debts) 5A (5,627) (6,592)
Assets recognised for the first time 332 310
Net gain/(loss) from the sale of assets 5B 13,433 6,302
Net foreign exchange gains/(losses) 5C 3,808 (247)
Net swap interest gains/(losses) 5D (935) (480)
Other gains/(losses) 5E 717 (8,198)
Amortisation of non-produced assets (121) (124)
Net result from associates and joint ventures 27 65
Operating result from continuing operations (29,187) (43,223)
Discontinued operation 2 149 101
Operating result (29,038) (43,122)
Other economic flows - Other non-owner movements in equity
Items that will not be reclassified to operating result
Revaluation of non-financial assets 9 1,601 1,235
Actuarial revaluations of superannuation (17,720) (13,014)
Other economic revaluations 224 41
Items that may be reclassified subsequently to operating result
Revaluation of equity investments 9 383 282
Comprehensive result - Total change in net worth (44,550) (54,578)
39
Australian Government operating statement (continued)

2015 2014
Note $m $m
Net operating balance (40,821) (34,259)

less Net acquisition of non-financial assets
Purchases of non-financial assets 15,623 15,144
less Sales of non-financial assets 2,497 444
less Depreciation 8,099 7,375
plus Change in inventories 588 721
plus Other movements in non-financial assets 22 989
Total net acquisition of non-financial assets 5,637 9,035
Fiscal balance (Net lending/borrowing) (46,458) (43,294)
The above statement should be read in conjunction with the accompanying notes.
40
Australian Government balance sheet

as at 30 June 2015
2015 2014
Note $m $m
Assets
Financial assets
Cash and deposits 10B 4,822 4,514
Advances paid 7A 41,769 34,834
Other receivables and accrued revenue 7A 41,208 42,167
Investments, loans and placements 7B 254,461 229,776
Equity investments 7C 44,089 40,477
Total financial assets 386,349 351,768
Non-financial assets
Land 7D 10,953 10,396
Buildings 7D 27,878 27,003
Specialist military equipment 7D 42,652 41,243
Other plant, equipment and infrastructure 7D 30,515 26,990
Intangibles 7D 8,678 8,536
Investment property 7D 387 375
Inventories 7E 8,531 8,371
Heritage and cultural assets 7D 11,332 10,825
Other non-financial assets 7F 5,062 3,523
Total non-financial assets 145,988 137,262
Total assets 7G 532,337 489,030
Liabilities
Interest bearing liabilities
Deposits held 8A 25,124 24,588
Government securities 8B 404,044 346,616
Loans 8C 9,707 8,464
Other borrowings 8D 5,336 4,990
Other interest bearing liabilities 8E 11,291 12,934
Total interest bearing liabilities 455,502 397,592
Provisions and payables
Superannuation liability 8F 248,540 221,948
Other employee liabilities 8F 20,091 18,720
Suppliers payable 8G 5,558 6,146
Personal benefits payable 8G 5,983 5,607
Subsidies payable 8G 4,529 4,482
Grants payable 8G 3,239 3,355
Australian currency on issue 8G 65,481 60,778
Other payables 8G 4,666 5,089
Other provisions 8G 27,713 30,049
Total provisions and payables 385,800 356,174
Total liabilities 841,302 753,766
Net worth(a)
Accumulated results (367,797) (320,385)
Reserves 58,832 55,649
Net worth (308,965) (264,736)
Current liabilities 113,930 108,637
Non-current liabilities 727,372 645,129
Total liabilities by maturity 841,302 753,766
Current assets 329,347 296,244
Non-current assets 202,990 192,786
Total assets by maturity 532,337 489,030
(a) Minority interests have not been separately disclosed as they are immaterial to the financial statements.
41
Australian Government cash flow statement

2015 2014
Note $m $m
OPERATING ACTIVITIES
Operating cash received
Taxes received 351,577 338,219
Receipts from sales of goods and services 18,513 17,747
Interest receipts 4,459 4,222
Dividend receipts 3,756 2,201
Other receipts 7,534 7,058
Total cash received 385,839 369,447
Operating cash used
Payments for employees (29,504) (29,599)
Payments for goods and services (85,016) (79,782)
Grants and subsidies paid (144,444) (140,092)
Interest paid (14,377) (14,308)
Personal benefits (130,891) (126,367)
Other payments (6,467) (7,153)
Total cash used (410,699) (397,301)
Net cash from discontinued operating activities 2 (7) 374
Net cash flows from operating activities 10A (24,867) (27,480)
INVESTING ACTIVITIES
Investments in non-financial assets
Sales of non-financial assets 2,380 714
Purchases of non-financial assets (15,114) (13,225)
Net cash flows from investments in non-financial assets (12,734) (12,511)
Investments in financial assets for policy purposes (5,190) (6,429)
Investments in financial assets for liquidity purposes (10,908) (33,553)
Net cash from discontinued investing activities 2 91 (58)
Net cash from investing activities (28,741) (52,551)
FINANCING ACTIVITIES
Financing cash received
Cash received
Borrowings 57,597 87,529
Other financing 2,693 1,919
Total cash received 60,290 89,448
Financing cash used
Borrowings
Other financing (6,374) (8,965)
Total cash used (6,374) (8,965)
Net cash flows from financing activities 53,916 80,483
Net (decrease)/increase in cash held 308 452
Cash at beginning of year 4,514 4,062
Cash at end of year 10B 4,822 4,514
Net cash flows from operating activities (24,867) (27,480)
Net cash flows from investments in non-financial assets (12,734) (12,511)
Cash surplus/(deficit) (37,601) (39,991)
Finance leases and similar arrangements (481) (2,662)
GFS cash surplus/(deficit) (38,082) (42,653)
42
Australian Government statement of changes in equity (net worth)
to the year ended 30 June 2015
Australian Government Reserves
Foreign
Asset currency
Accumulated revaluation translation Investments Statutory Other Total
Item results reserve(a) reserve(b) reserve(c) funds(d) reserve(e) reserves Total
$m $m $m $m $m $m $m $m
Adjusted opening balance as at 1 July 2013 (259,041) 33,844 (156) 14,000 (3,248) 4,443 48,883 (210,158)
Comprehensive result - Total change in
net worth (53,987) 1,461 (166) (1,994) 3 105 (591) (54,578)
Transfers to/(from)/between reserves (7,357) 37 - (982) 8,799 (497) 7,357 -
Net worth as at 30 June 2014 (f) (320,385) 35,342 (322) 11,024 5,554 4,051 55,649 (264,736)
Non-material changes in accounting policy and errors 176 55 - 99 - (9) 145 321
Adjusted opening balance as at 1 July 2014 (320,209) 35,397 (322) 11,123 5,554 4,042 55,794 (264,415)
43

net worth (46,721) 1,934 219 9 - 9 2,171 (44,550)
Transfers to/(from)/between reserves (867) (47) (2) (4,308) 1,570 3,654 867 -
Net worth as at 30 June 2015 (f) (367,797) 37,284 (105) 6,824 7,124 7,705 58,832 (308,965)
(a) The asset revaluation reserve includes net revaluation increments and decrements arising from the revaluation of property, plant and equipment.

(b) The foreign currency translation reserve records foreign currency differences arising from the translation of self-sustaining foreign operations.
(c) The investments reserve records the Australian Governments interest in portfolio authorities and companies.
(d) Statutory funds comprise amounts set aside out of operating surpluses under a specific Act or Statute.
(e) Other reserves include amounts set aside out of operating surpluses for purposes other than those detailed above, including general reserves.
(f) Minority interests have not been separately disclosed as they are immaterial to the financial statements.
SECTOR STATEMENTS
Australian Government operating statement by sector including General Government Sector Financial Report
General Public non-financial Public financial Eliminations and Australian
Note Government corporations corporations(a) netting(b) Government
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m
Taxation revenue 3A 355,009 348,372 - - - - (99) (140) 354,910 348,232
Sales of goods and services 3B 8,975 8,575 9,840 9,389 3,257 6,713 (4,171) (7,773) 17,901 16,904
Interest income 3C 3,145 3,339 44 66 2,271 1,981 (961) (980) 4,499 4,406
Dividend income 3C 6,178 4,105 - - 71 64 (2,322) (1,712) 3,927 2,457
Other 3D 7,006 6,843 103 81 176 8,999 (319) (9,068) 6,966 6,855
Total revenue 380,313 371,234 9,987 9,536 5,775 17,757 (7,872) (19,673) 388,203 378,854
Wages and salaries 4A 18,357 18,823 3,764 3,548 286 498 (125) (350) 22,282 22,519
Superannuation 4A 6,927 6,372 354 474 66 91 (23) (44) 7,324 6,893
Depreciation and amortisation 4B 6,804 6,340 1,255 998 57 83 (17) (46) 8,099 7,375
Supply of goods and services 4C 79,289 75,134 5,196 4,835 2,775 5,988 (3,950) (7,201) 83,310 78,756
47
Other operating expenses 4A 5,742 6,017 852 681 273 399 (29) (87) 6,838 7,010
Total gross operating expenses 117,119 112,686 11,421 10,536 3,457 7,059 (4,144) (7,728) 127,853 122,553
Superannuation interest expense 4A 8,999 8,214 - - - - - - 8,999 8,214
Interest expenses 4D 16,024 15,050 420 363 1,313 1,154 (941) (921) 16,816 15,646
Current transfers
Current grants 4E 124,635 115,960 - - - - (68) (50) 124,567 115,910
Subsidy expenses 12,506 13,368 - - - - (162) (171) 12,344 13,197
Personal benefits 129,190 125,184 - - - - - - 129,190 125,184
Tax expenses - - (66) 35 48 88 18 (123) - -
Total current transfers 266,331 254,512 (66) 35 48 88 (212) (344) 266,101 254,291
Capital transfers
Mutually agreed write-downs 4E 1,857 2,627 - - - - - (150) 1,857 2,477
Other capital grants 4E 7,398 18,732 - - - - - (8,800) 7,398 9,932
Sector statements
Total capital transfers 9,255 21,359 - - - - - (8,950) 9,255 12,409
Total expenses 4F 417,728 411,821 11,775 10,934 4,818 8,301 (5,297) (17,943) 429,024 413,113
Net operating balance (37,415) (40,587) (1,788) (1,398) 957 9,456 (2,575) (1,730) (40,821) (34,259)
(a) Includes Medibank Private Limited (discontinued operation) for the period prior to disposal refer Note 2.
(b) The eliminations and netting column includes the elimination of inter-sector transactions and the netting off of gains and losses across sectors
.
Sector statements
Australian Government operating statement by sector including General Government Sector Financial Report (continued)
Note Government corporations corporations(a) netting(b) Government
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m
Other economic flows - included
in operating result
Net write-downs of assets 5A (5,412) (6,537) (217) (66) (7) (104) 9 115 (5,627) (6,592)
Assets recognised for the first time 326 310 5 - - 2 1 (2) 332 310
Net gain/(loss) from the sale of assets 5B 10,690 6,093 50 197 (73) 34 2,766 (22) 13,433 6,302
Net foreign exchange gains/(losses) 5C (2,335) (402) 2 8 6,142 149 (1) (2) 3,808 (247)
Net swap interest gains/(losses) 5D (977) (524) 8 11 35 33 (1) - (935) (480)
Other gains/(losses) 5E 4,706 (8,322) 11 14 42 124 (4,042) (14) 717 (8,198)
Amortisation of non-produced assets (58) (64) (63) (60) (3) (10) 3 10 (121) (124)
Net result from associates and joint ventures 27 64 - - - - - 1 27 65
Operating result (30,448) (49,969) (1,992) (1,294) 7,093 9,684 (3,840) (1,644) (29,187) (43,223)
Discontinued operation 2 - - - - - - 149 101 149 101
Net operating result (30,448) (49,969) (1,992) (1,294) 7,093 9,684 (3,691) (1,543) (29,038) (43,122)
48
Other economic flows - through equity

Will not be reclassified to operating result
Revaluation of non-financial assets 9 1,647 1,158 (73) 63 29 14 (2) - 1,601 1,235
Actuarial revaluations of superannuation (17,780) (13,233) 145 220 (85) (1) - - (17,720) (13,014)
Other economic revaluations (3,873) (58) (234) (94) (1,264) 157 5,595 36 224 41
May be reclassified to operating result
Revaluation of equity investments 9 3,201 7,679 - - 380 262 (3,198) (7,659) 383 282
Comprehensive result (47,253) (54,423) (2,154) (1,105) 6,153 10,116 (1,296) (9,166) (44,550) (54,578)
Net operating balance (37,415) (40,587) (1,788) (1,398) 957 9,456 (2,575) (1,730) (40,821) (34,259)
Purchases of non-financial assets 11,337 9,613 4,233 4,726 53 805 - - 15,623 15,144
less Sales of non-financial assets 2,423 241 75 197 - 5 (1) 1 2,497 444
less Depreciation 6,804 6,340 1,255 998 57 83 (17) (46) 8,099 7,375
plus Change in inventories 582 704 8 14 (2) 2 - 1 588 721
plus Other movements in non-financial assets 14 114 18 875 (11) (2) 1 2 22 989
Total net acquisition of non-financial assets 2,706 3,850 2,929 4,420 (17) 717 19 48 5,637 9,035
Fiscal balance (Net lending/borrowing) (40,121) (44,437) (4,717) (5,818) 974 8,739 (2,594) (1,778) (46,458) (43,294)
(b) The eliminations and netting column includes the elimination of inter-sector transactions and the netting off of gains and losses across sectors.
Australian Government balance sheet by sector including General Government Sector Financial Report
as at 30 June 2015
General Public non-financial Public financial Eliminations(a) Australian
Note Government corporations corporations Government
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m
Assets
Financial assets
Cash and deposits 10B 3,156 3,844 2,042 1,380 480 1,030 (856) (1,740) 4,822 4,514
Advances paid 7A 40,658 34,040 5 8 2,177 1,851 (1,071) (1,065) 41,769 34,834
Other receivables and accrued revenue 7A 42,335 41,865 1,272 1,172 250 571 (2,648) (1,441) 41,209 42,167
Investments, loans and placements 7B 136,376 117,611 624 415 158,175 143,954 (40,714) (32,204) 254,461 229,776
Equity investments 7C 83,496 75,576 3 9 401 638 (39,811) (35,746) 44,089 40,477
Total financial assets 306,021 272,936 3,946 2,984 161,483 148,044 (85,100) (72,196) 386,350 351,768
Land 7D 9,941 9,331 870 916 143 149 (1) - 10,953 10,396
Buildings 7D 25,639 24,847 1,952 1,871 287 284 - 1 27,878 27,003
Specialist military equipment 7D 42,652 41,243 - - - - - - 42,652 41,243
49
Other plant, equipment and infrastructure 7D 13,624 13,097 16,714 13,617 177 275 - 1 30,515 26,990
Intangibles 7D 6,544 6,183 2,100 2,091 36 263 (2) (1) 8,678 8,536
Investment property 7D 187 183 200 192 - - - - 387 375
Inventories 7E 8,415 8,253 107 106 9 11 - 1 8,531 8,371
Heritage and cultural assets 7D 11,332 10,825 - - - - - - 11,332 10,825
Tax assets - - 915 913 4 12 (919) (925) - -
Other non-financial assets 7F 4,896 3,310 217 237 37 91 (88) (115) 5,062 3,523
Total non-financial assets 123,230 117,272 23,075 19,943 693 1,085 (1,010) (1,038) 145,988 137,262
Total assets 7G 429,251 390,208 27,021 22,927 162,176 149,129 (86,110) (73,234) 532,338 489,030
(a) Comprises the elimination of inter-sector balances.
Sector statements
Sector statements
Australian Government balance sheet by sector including General Government Sector Financial Report (continued)
as at 30 June 2015
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m
Liabilities
Deposits held 8A 218 211 - - 60,486 53,574 (35,580) (29,197) 25,124 24,588
Government securities 8B 409,937 351,282 - - - - (5,893) (4,666) 404,044 346,616
Loans 8C 5,693 4,708 2,660 2,510 2,406 2,285 (1,052) (1,039) 9,707 8,464
Other borrowing 8D 1,509 1,529 3,826 3,461 - - 1 - 5,336 4,990
Other interest bearing liabilities 8E 6,715 5,674 15 14 4,562 7,247 (1) (1) 11,291 12,934
Total interest bearing liabilities 424,072 363,404 6,501 5,985 67,454 63,106 (42,525) (34,903) 455,502 397,592
Superannuation liability 8F 248,209 221,747 24 4 306 197 1 - 248,540 221,948
50
Other employee liabilities 8F 17,052 15,930 1,636 1,349 1,403 1,441 - - 20,091 18,720
Suppliers payable 8G 4,601 4,881 1,002 1,036 60 408 (105) (179) 5,558 6,146
Personal benefits payable 8G 5,983 5,607 - - - - - - 5,983 5,607
Subsidies payable 8G 4,529 4,482 - - - - - - 4,529 4,482
Grants payable 8G 3,239 3,355 - - - - - - 3,239 3,355
Australian currency on issue 8G - - - - 65,481 60,778 - - 65,481 60,778
Tax liabilities - - 674 560 1 28 (675) (588) - -
Other payables 8G 2,688 3,133 1,956 1,307 2,668 2,043 (2,646) (1,394) 4,666 5,089
Other provisions 8G 27,332 29,182 382 393 1 477 (2) (3) 27,713 30,049
Total provisions and payables 313,633 288,317 5,674 4,649 69,920 65,372 (3,427) (2,164) 385,800 356,174
Total liabilities 737,705 651,721 12,175 10,634 137,374 128,478 (45,952) (37,067) 841,302 753,766
Australian Government balance sheet by sector including General Government Sector Financial Report (continued)
as at 30 June 2015
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m
Net worth
Accumulated results (360,194) (316,559) (3,543) (1,530) (142) 1,370 (3,918) (3,666) (367,797) (320,385)
Reserves 51,740 55,046 1,847 1,852 24,698 19,150 (19,453) (20,399) 58,832 55,649
Contributed equity - - 16,542 11,971 246 131 (16,788) (12,102) - -
Net worth (308,454) (261,513) 14,846 12,293 24,802 20,651 (40,159) (36,167) (308,965) (264,736)
Current liabilities 85,999 76,567 4,252 3,687 68,643 64,590 (44,964) (36,207) 113,930 108,637
Non-current liabilities 651,706 575,154 7,923 6,947 68,731 63,888 (988) (860) 727,372 645,129
Total liabilities by maturity 737,705 651,721 12,175 10,634 137,374 128,478 (45,952) (37,067) 841,302 753,766
Current assets 220,658 193,097 3,839 3,059 149,401 135,862 (44,551) (35,774) 329,347 296,244
Non-current assets 208,593 197,111 23,182 19,868 12,775 13,267 (41,560) (37,460) 202,990 192,786
Total assets by maturity 429,251 390,208 27,021 22,927 162,176 149,129 (86,111) (73,234) 532,337 489,030
51
Sector statements
Sector statements
Australian Government cash flow statement by sector including General Government Sector Financial Report
Government corporations corporations(a) netting(b) Government
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m
Cash received
Taxes received 351,675 338,215 - - - - (98) 4 351,577 338,219
Receipts from sales of
goods and services 8,839 8,579 10,732 10,421 3,104 6,675 (4,162) (7,928) 18,513 17,747
Interest receipts 3,056 3,128 44 72 2,327 1,894 (968) (872) 4,459 4,222
Dividend receipts 4,745 3,131 - 3 58 43 (1,047) (976) 3,756 2,201
GST receipts - - 370 277 18 18 (388) (295) - -
Other receipts 7,598 6,811 34 12 210 9,005 (308) (8,770) 7,534 7,058
Total cash received 375,913 359,864 11,180 10,785 5,717 17,635 (6,971) (18,837) 385,839 369,447
Cash used
52
Taxes paid - - (43) (84) (31) (61) 74 145 - -

Payments for employees (25,775) (25,889) (4,130) (3,759) (97) (430) 498 479 (29,504) (29,599)
Payments for goods and services (80,252) (75,845) (6,086) (5,599) (2,771) (5,575) 4,093 7,237 (85,016) (79,782)
Grants and subsidies paid (144,512) (148,990) - - (162) (123) 230 9,021 (144,444) (140,092)
Interest paid (13,924) (13,972) (57) (65) (1,366) (1,137) 970 866 (14,377) (14,308)
Personal benefits (130,891) (126,367) - - - - - - (130,891) (126,367)
GST paid - - (385) (396) - - 385 396 - -
Other payments (5,289) (5,769) (537) (604) (311) (266) (330) (514) (6,467) (7,153)
Total cash used (400,643) (396,832) (11,238) (10,507) (4,738) (7,592) 5,920 17,630 (410,699) (397,301)
Net cash from discontinued operating activities - - - - - - (7) 374 (7) 374
Net cash from operating activities (24,730) (36,968) (58) 278 979 10,043 (1,058) (833) (24,867) (27,480)
Investments in non-financial assets
Sales of non-financial assets 2,305 457 75 257 - 5 - (5) 2,380 714
Purchases of non-financial assets (11,280) (9,012) (3,801) (3,523) (53) (803) 20 113 (15,114) (13,225)
Net cash flows from investments
in non-financial assets (8,975) (8,555) (3,726) (3,266) (53) (798) 20 108 (12,734) (12,511)
(b) The eliminations and netting column includes the elimination of inter-sector transactions and the netting off of certain cash flows across sectors.
Australian Government cash flow statement by sector including General Government Sector Financial Report (continued)
Government corporations corporations(a) netting(b) Government
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m
Investments in financial assets for
policy purposes (5,163) (6,371) - - (63) - 36 (58) (5,190) (6,429)
Investments in financial assets for
liquidity purposes (11,953) (7,718) (46) 656 (12,315) (40,033) 13,406 13,542 (10,908) (33,553)
Net cash from discontinued investing activities - - - - - - 91 (58) 91 (58)
Net cash from investing activities (26,091) (22,644) (3,772) (2,610) (12,431) (40,831) 13,553 13,534 (28,741) (52,551)
Cash flows from financing activities
Cash received
Borrowings 52,381 63,218 105 - 6,381 27,366 (1,270) (3,055) 57,597 87,529
Other financing - - 4,817 3,233 5,456 3,961 (7,580) (5,275) 2,693 1,919
Total cash received 52,381 63,218 4,922 3,233 11,837 31,327 (8,850) (8,330) 60,290 89,448
53
Cash used
Other financing (2,248) (1,875) (430) (412) (935) (604) (2,761) (6,074) (6,374) (8,965)
Total cash used (2,248) (1,875) (430) (412) (935) (604) (2,761) (6,074) (6,374) (8,965)
Net cash from discontinued financing activities - - - - - - - - - -
Net cash from financing activities 50,133 61,343 4,492 2,821 10,902 30,723 (11,611) (14,404) 53,916 80,483
Net increase / (decrease) in cash (688) 1,731 662 489 (550) (65) 884 (1,703) 308 452
Cash at beginning of year 3,844 2,113 1,380 891 1,030 1,095 (1,740) (37) 4,514 4,062
Cash at end of year 3,156 3,844 2,042 1,380 480 1,030 (856) (1,740) 4,822 4,514
Net cash flows from operating activities (24,730) (36,968) (58) 278 979 10,043 (1,058) (833) (24,867) (27,480)
Net cash flows from investments
in non-financial assets (8,975) (8,555) (3,726) (3,266) (53) (798) 20 108 (12,734) (12,511)
Sector statements
Cash surplus/(deficit) (33,705) (45,523) (3,784) (2,988) 926 9,245 (1,038) (725) (37,601) (39,991)
Finance leases and similar arrangements (72) (586) (409) (2,076) - - - - (481) (2,662)
GFS cash surplus/(deficit) (33,777) (46,109) (4,193) (5,064) 926 9,245 (1,038) (725) (38,082) (42,653)
(b) The eliminations and netting column includes the elimination of inter-sector transactions and the netting off of certain cash flows across sectors.
Sector statements
General Government Sector statement of changes in equity
to the year ended 30 June 2015
General Government Reserves
Foreign
Asset currency
Accumulated revaluation translation Investments Other Total
Item results reserve reserve reserve reserves reserves Total
$m $m $m $m $m $m $m
Adjusted opening balance as at 1 July 2013 (249,138) 29,271 (220) 12,880 117 42,048 (207,090)
Comprehensive result - Total change in net worth (68,336) 1,118 (109) 12,948 (44) 13,913 (54,423)
Transfers to/(from)/between reserves 915 53 - (984) 16 (915) -
Net worth as at 30 June 2014 (316,559) 30,442 (329) 24,844 89 55,046 (261,513)
Non-material changes in accounting policy and errors 168 55 - 98 (9) 144 312
Adjusted opening balance as at 1 July 2014 (316,391) 30,497 (329) 24,942 80 55,190 (261,201)
Comprehensive result - Total change in net worth (48,111) 1,597 166 (916) 11 858 (47,253)
Transfers to/(from)/between reserves 4,308 (3) - (4,308) 3 (4,308) -
54
Net worth as at 30 June 2015 (360,194) 32,091 (163) 19,718 94 51,740 (308,454)
NOTES TO THE FINANCIAL STATEMENTS
INDEX TO NOTES
NOTE 1: BASIS OF FINANCIAL STATEMENTS PREPARATION .................................59
NOTE 2: DISCONTINUED OPERATIONS ...............................................................66
NOTE 3: REVENUE FROM TRANSACTIONS ..........................................................69
Note 3A: Taxation revenue ........................................................................................... 70
Note 3B: Sales of goods and services .......................................................................... 73
Note 3C: Interest and dividend income ......................................................................... 74
Note 3D: Other sources of non-taxation revenue ......................................................... 74
NOTE 4: EXPENSES FROM TRANSACTIONS .........................................................75

Note 4A: Employee and superannuation expenses ...................................................... 76
Note 4B: Depreciation and amortisation expenses ....................................................... 77
Note 4C: Supply of goods and services ........................................................................ 78
Note 4D: Interest expense ............................................................................................ 79
Note 4E: Grants expense .............................................................................................. 79
Note 4F: Expenses by function ..................................................................................... 80
NOTE 5: OTHER ECONOMIC FLOWS ...................................................................82

Note 5A: Net write-down of assets (including bad and doubtful debts) ........................ 84
Note 5B: Net gain/(loss) from the sale of assets ........................................................... 85
Note 5C: Net foreign exchange gains/(losses) ............................................................. 86
Note 5D: Net swap interest gains/(losses) .................................................................... 86
Note 5E: Other gains/(losses) ....................................................................................... 86
NOTE 6: FAIR VALUE MEASUREMENT.................................................................87

NOTE 7: ASSETS ..............................................................................................96
Note 7A: Advances paid and receivables ..................................................................... 97
Note 7B: Investments, loans and placements ............................................................... 99
Note 7C: Equity investments ....................................................................................... 100
Note 7D: Land and buildings, plant, equipment and infrastructure, heritage
and cultural assets and intangibles ........................................................... 101
Note 7E: Inventories .................................................................................................... 108
Note 7F: Other non-financial assets............................................................................ 108
Note 7G: Assets by function(a) ................................................................................... 108
NOTE 8: LIABILITIES .......................................................................................109

Note 8A: Deposit liabilities .......................................................................................... 110
Note 8B: Government securities ................................................................................. 110
Note 8C: Loans ........................................................................................................... 110
Note 8D: Other borrowings ......................................................................................... 111
Note 8E: Other interest bearing liabilities .................................................................... 111
Note 8F: Employee benefits ........................................................................................ 112
Note 8G: Other provisions and payables .................................................................... 114
57
NOTE 9: NET REVALUATION INCREASES/(DECREASES) .....................................116

NOTE 10: RECONCILIATION OF CASH ...............................................................117
NOTE 11: COMMITMENTS ...............................................................................118
NOTE 12: RISKS ............................................................................................120
Note 12A: Contingencies ............................................................................................ 121
Note 12B: Financial instruments ................................................................................. 134
Note 12C: Defined benefit superannuation plans ....................................................... 152
NOTE 13: EVENTS OCCURRING AFTER BALANCE DATE .....................................164

NOTE 14: RECONCILIATIONS AND EXPLANATIONS ............................................164
Note 14A: Reconciliations to ABS GFS measures ..................................................... 165
Note 14B: Reconciliation to original budget ................................................................ 169
Note 14C: Glossary of key fiscal aggregates .............................................................. 179
NOTE 15: AUDIT EXPENSES ............................................................................181

NOTE 16: LIST OF AUSTRALIAN GOVERNMENT REPORTING ENTITIES................. 182
58
Note 1: Basis of financial statements preparation
1.1 Purpose
The purpose of this note is to outline the basis on which the financial statements for the
Australian Government (whole of government) and the general government sector
(GGS) have been prepared.
Significant accounting policies that are relevant to understanding the financial

statements are provided throughout the notes to the financial statements.
Except as otherwise noted, the accounting policies detailed in this note and throughout
the notes to the financial statements are applicable at both the whole of government
level and for the GGS.
1.2 Statement of compliance

The Australian Government Consolidated Financial Statements (CFS) are required by
section 48 of the Public Governance, Performance and Accountability Act 2013.
The CFS are general purpose financial statements that have been prepared for the
whole of government and the GGS in accordance with Australian Accounting
Standards (AAS), including AASB 1049 Whole of Government and General Government
Sector Financial Reporting (AASB 1049).
The GGS financial statements are included in the CFS and can be found in the Sector
statements and the Notes to the financial statements.
1.3 Basis of accounting

The purpose of the CFS is to provide users with information about the stewardship by
the Australian Government and accountability for the resources entrusted to it;
information about the financial position, performance and cash flows of the Australian
Government; and information that facilitates assessment of the macro-economic
impact of the Australian Government.
The principles and rules in the Australian Bureau of Statistics Australian System of
Government Finance Statistics: Concepts, Sources and Methods 2005 ABS Catalogue
No. 5514.0 (ABS GFS manual) have been applied in the production of these financial
statements, except in instances in which the application would conflict with AAS.
The 2014-15 financial statements for the whole of government and the GGS have been
prepared on the basis of the ABS GFS manual effective as at 1 July 2014.
Where the key fiscal aggregates presented on the face of the financial statements are
materially different to that measured in accordance with the applied ABS GFS manual,
a reconciliation between the two measures has been provided (refer Note 14A).
59
The CFS has been prepared on an accrual basis and is presented in Australian dollars.
With the exception of advances paid to the International Development Association
(IDA) and the Asian Development Fund (ADF) the key fiscal aggregates reported in
the CFS GGS financial statements materially align to the GGS financial statements
included in the 2014-15 Final Budget Outcome (FBO). As detailed in Part 2, Note 2 of
the 2014-15 FBO, AASB 1049 requires the advances paid to the IDA and ADF to be
recognised at fair value. Under the ABS GFS manual, these advances are recorded at
nominal value. The ABS GFS treatment is adopted in the FBO while the AAS treatment
is adopted in the CFS.
1.4 New Australian Accounting Standards

Adoption of New Australian Accounting Standard Requirements
During 2014-15, the Australian Government adopted all applicable AAS that became
effective during 2014-15. Other than noted below, the application of new accounting
standards did not materially impact the operations of the Australian Government.
The Australian Government has early adopted AASB 2015-7 Amendments to Australian
Accounting Standards Fair Value Disclosures of Not-for-Profit Public Sector Entities
(AASB 2015-7). AASB 2015-7 amends AASB 13 Fair Value Measurement to provide
disclosure relief to not-for-profit public sector entities from certain disclosures about
the fair value measurements of property, plant and equipment held for their current
service potential rather than to generate net cash inflows. This includes relief from
disclosures of quantitative information about the significant unobservable inputs used
in fair value measurements and of the sensitivity of certain fair value measurements to
changes in unobservable inputs.
Future Australian Accounting Standards Requirements

The Australian Accounting Standards Board (AASB) has issued a number of new
standards, amendments to standards and interpretations that are effective for future
reporting periods:
AASB 15 Revenue from Contracts with Customers (AASB 15) replaces components of
AASB 111 Construction Contracts, AASB 118 Revenue and AASB 1004 Contributions.
AASB 15 could significantly change the pattern of revenue and profit recognition
and internal budgeting processes. The new standard is effective from
1 January 2018.
AASB 9 Financial Instruments represents the finalisation of the three phase project to
replace AASB 139 Financial Instruments: Recognition and Measurement. It incorporates
new principles for the requirements for recognition and measurement of financial
assets and liabilities and their derecognition and general hedge accounting. This is
likely to impact on the categorisation, recognition and measurement of financial
instruments particularly those currently held at fair value through profit or loss.
The new standard is effective from 1 January 2018.
60
AASB 124 Related Party Disclosures removes the current exemption for not-for-profit
public sector entities such as government departments, and adds implementation
guidance with examples specifically tailored to the Australian environment.
Related party transactions will be required to be disclosed to the extent necessary
for users to understand the potential effect of the relationship on the financial
statements. The new standard is effective from 1 July 2016.
Other than the above, current pronouncements related to future reporting periods are
not expected to materially impact on future reporting periods or will not apply to the
operations of the Australian Government.
1.5 Prior year adjustments and changes in accounting policy

For the 2013-14 comparatives, adjustments were made to tax related items as a result of
amending the classification of provisions from bad and doubtful tax debts and credit
amendments to dual tax debts. In the operating statement, this resulted in a reduction
in taxation revenue from individuals of $684 million and an offsetting reduction in bad
and doubtful debts of $684 million, reducing the net operating balance but with no
impact on the operating result. In the balance sheet, there was a reduction to gross
taxation receivables of $1,007 million with a corresponding reduction in the provisions
for doubtful debts and credit amendments, resulting in no change to net receivables.
The comparatives have been adjusted to eliminate Future Fund imputation credits
receivable from, and payable to, the Australian Taxation Office. These were previously
recognised on a gross basis. The comparative imputation credit receivable at
30 June 2014 was $764 million (1 July 2013: $489 million) while the payable was
$343 million (1 July 2013: $220 million). The net movement of $153 million has been
eliminated against income tax revenue in 2013-14.
The 2013-14 comparatives were also restated to reclassify work in progress from other
non-financial assets to the respective classes of buildings, infrastructure, plant and
equipment and intangibles. Other reclassifications have been disclosed in the relevant
notes.
1.6 The reporting entity and basis of consolidation

For the purposes of these financial statements, the Australian Government means the
executive (consisting principally of Ministers and their departments), the legislature
(that is, the Parliament) and the judiciary (that is, the courts). Where the Australian
Government is referred to throughout these statements it is intended to also mean the
Commonwealth of Australia. The Australian Government reporting entity (referred
to as the reporting entity) includes Australian Government Departments of State,
Parliamentary Departments, other non-corporate Commonwealth entities, corporate
Commonwealth entities and Commonwealth companies in which the Australian
Government holds a controlling interest.
61
The Australian Government controls an entity when it is exposed to, or has rights to
variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. The existence of control
in the context of these financial statements does not in any way indicate that there is
necessarily control over the manner in which statutory/professional functions are
performed by an entity.
In the process of reporting the Australian Government as a single economic entity, all
material transactions and balances between government-controlled entities are
eliminated. Any dissimilar accounting policies applied at the entity level are amended
to ensure consistent policies are adopted in these financial statements where the effect
is material.
Where control of an entity is obtained during a financial year, results are included in
the consolidated operating statement and consolidated cash flow statement from the
date on which control commenced. Where control of an entity ceases during a financial
year, results are included for that part of the year for which control existed.
1.7 Sectors
The sector classification of Australian Government entities follows that defined by the
Australian Bureau of Statistics for the purposes of Government Finance Statistics
(GFS); this, in turn, is based on international standards issued by the International
Monetary Fund (IMF).
Figure 1: Institutional structure of the public sector
Total public sector
Public financial corporations Total non-financial public

sector (PFC) sector
(Perform central banking functions,

accept deposits and have the
authority to incur liabilities and
acquire assets in the market)
General government sector Public non-financial

(GGS) corporations sector (PNFC)
(GGS provides non-market public (Provide goods and services to

services and are funded mainly consumers on a commercial basis,
through taxes and levies) are funded largely by the sale of
these goods and services, and are
generally legally distinguishable from
the governments that own them)
62
1.8 Significant accounting judgements and estimates

In preparing financial statements, Australian Government entities are required to
make judgements and estimates that impact:
income and expenses for the year;
the reported amounts of assets and liabilities; and
the disclosure of off-balance sheet arrangements, including contingent assets and
contingent liabilities.
Judgements and estimates are subject to periodic review, including through the receipt
of actuarial advice. Judgements and estimates are based on historical experience,
various other assumptions believed to be reasonable under the circumstances and,
where appropriate, practices adopted by other entities.
Specialist military equipment
Prior to 2014-15, AASB 1049 permitted defence weapons platforms (DWPs) to be

measured in the CFS at the historic cost basis of measurement. From 2014-15, this
standard requires specialist military equipment (SME), which includes DWPs, to be
measured at fair value, if fair value can be reliably measured.
The requirement to recognise almost all property, plant and equipment assets at fair
value is unique to government. This requirement has arisen from the multi-year
project to reduce complexity through the harmonisation of the two reporting
frameworks applicable to government AAS and GFS. The accounting standard
AASB 1049 is the result of this harmonisation project and has been in place since
2008-09. As part of the harmonisation process, the option available to reporting entities
under the accounting standards to recognise property, plant and equipment either at
cost, or at fair value, was removed for consolidated government reporting. The
removal of this option was to provide consistency with the broad GFS requirement
that all assets be recorded at market or fair value.
AASB 1049 does provide one exception to this requirement, and that is where fair
value cannot be reliably measured. Given the difficulties in measuring DWPs 1,
AASB 1049 also provided extended transitional relief until 2014-15 from the
requirement to measure these assets at fair value. This relief, which only applied to
1 The basis of conclusion to the amending standard AASB 2012-8 Amendments to AASB 1049
Extension of Transitional Relief for the Adoption of Amendments to the ABS GFS Manual relating to
Defence Weapons Platforms, stated the Board considered a submission arguing that more time
was needed to measure assets classified as defence weapons platforms at fair value, for the
purposes of financial reporting under AASB 1049, due to the magnitude and complexity of
the valuation exercise for such assets. Constituents familiar with the nature and quantity of
the assets involved advised the Board that an extension of transitional relief for two years
would be required to comply. The Board agreed that the extension is warranted, and
considered that such an extension should be sufficient and therefore would not expect to
provide further relief for such assets in the future.
63
DWPs, was in recognition of the complexity involved in determining the fair values of
DWPs.
In applying the fair value requirement of AASB 1049, AASB 13 Fair Value Measurement
requires the use of an exit price and a valuation approach that maximises observable
inputs and is compatible with the market, income or cost valuation approaches.
The process undertaken over several years to assess the reliability of fair value
measurement for DWPs has involved the Department of Finance (Finance) working
collaboratively with the Department of Defence (Defence). Identifying fair values for
SME is a complex and time consuming task due to the unique nature and number of
the assets involved and the complexity of determining fair value.
The Australian Government, through Finance and Defence, has not completed its work
to establish reliable measurements of the fair value of DWPs in time for the
2014-15 CFS. Consequently SME continues to be measured at the historic cost basis of
measurement in note 7D, at an amount of $42,652 million.
The Australian Government is committed to preparing the CFS in accordance with
applicable accounting standards, including recognising SME at fair value where this
can be done reliably. Finance intends to finalise the assessment to measure the SME
class of assets at fair value in time for inclusion for the 2015-16 CFS.
Other significant estimates and judgements
In the process of applying the accounting policies described in the relevant note,
judgements and estimates made by Australian Government entities that have the most
significant impact on the amounts recorded in these financial statements include:
Significant accounting estimate / judgement Note
Taxation revenue items reported under the economic transaction method 3A
Impairment key assumptions and methodologies used to estimate the 5A

recoverability of accounts receivable, statutory debts and inventory
Fair value assumptions used in valuation techniques for the fair value of financial 6, 12B
assets and liabilities, including derivatives
Fair value and impairment test key assumptions underlying recoverable amount 5A, 6
and valuations of land, property, plant and equipment and infrastructure
Measurement of depreciation and amortisation estimate of expected useful lives 4B, 7D
Measurement of defined benefit and long service leave obligations principal 8F, 12C
actuarial assumptions
Recognition and measurement of provisions and contingencies key assumptions 8G, 12A
about the likelihood and magnitude of an outflow or inflow of resources
64
1.9 Insurance
Australian Government entities operating in the GGS are members of the Australian
Governments self managed fund for insurable risks, Comcover. This excludes workers
compensation where the risk continues to be managed by Comcare. Australian
Government entities operating outside the GGS adopt their own insurance strategies,
which includes both self-insurance and commercial insurance coverage.
1.10 Rounding
All amounts have been rounded to the nearest million dollars, unless otherwise noted.
1.11 Audit of Australian Government controlled entities

These financial statements are consolidated from the 2014-15 financial statements of
Australian Government entities that were all audit signed.
1.12 Compliance with the Constitution
Section 83 of the Constitution provides that no amount may be paid out of the
Consolidated Revenue Fund except under an appropriation made by law. Australian
Government entities continue to monitor their level of compliance with section 83 of
the Constitution across all legislation for which they have legislative responsibility.
It is important to note that it is not possible in all instances to fully remove the
potential for section 83 breaches under existing legislation. In many cases the
Australian Government relies on information provided by payment recipients to
calculate and pay appropriate entitlements, and this information is not always timely
or accurate. The following table shows the number and value of actual and potential
breaches identified in 2014-15, and amounts recovered to date, for those entities that
have reported actual or potential non-compliance with section 83 of the Constitution:
65
Commonwealth controlled entity Actual breaches Potential breaches Recovered/

Value Value Waived
No. $'000 No. $'000 $'000
Australian Accounting Standards Board 7 90 - - -
Australian Bureau of Statistics 20 46 - - 46
Attorney-General's Department - - 47 56 -
Australian Customs and Border
Protection Service 270 4,011 - - 3,736
Australian Financial Security Authority 1 5 - - 5
Australian Taxation Office 8 20 - - 20
Department of Agriculture - - 24 1 -
Department of Defence - - 363 466 399
Department of Finance 40 16 - - 15
Department of Health 398 58,227 38 1,124 58,227
Department of Human Services 35 44 - - 29
Department of Infrastracture and
and Regional Development - - 1 13 -
Department of Social Services 36 5,000 2,346,496 2,506,355 1,562,848
Department of the Prime Minister
and Cabinet 5,913 942 - - 136
Department of the Treasury 3 14,111 - - -
Department of Veterans' Affairs - - n/a (a) 46,137 n/a (a)
Total 6,731 82,512 2,346,969 2,554,152 1,625,461
(a) The number of potential breaches has not been quantified.
The Australian Government continues to have regard to developments in case law,

including the High Courts most recent decision on Commonwealth expenditure in
Williams v Commonwealth [2014] HCA 23, as they contribute to the larger body of law
relevant to the development of Commonwealth programmes. In accordance with its
general practice, the Government will continue to monitor and assess risk and decide
on any appropriate actions to respond to risks of expenditure not being consistent with
constitutional or other legal requirements.
Note 2: Discontinued operations
During 2014-15 the Australian Government sold Medibank Private Limited

(Medibank) through an initial public offering.
The Medibank Share Offer prospectus was released on 20 October 2014. Medibank was
listed on the Australian Stock Exchange on 25 November 2014.
Medibanks pre-disposal results, adjusted for the elimination of transactions with

Australian Government entities, have been reported as a discontinued operation in the
2014-15 CFS, including the reclassification of comparatives.
For the Australian Government, the impact of the disposal was:

The recognition of a gain on disposal of $4,343 million, comprising proceeds
received from the sale of $5,685 million, less the carrying amount of Medibanks net
assets of $1,263 million (in Note 5B) at the date of sale and selling costs of
$79 million;
66
The recognition of a payable of $4 million for Medibank sales outstanding refunds

at 30 June 2015; and
A net cash inflow of $5,088 million, representing proceeds of $5,685 million from
the sale of Medibank, amounts yet to be refunded of $4 million, less $79 million in
selling costs paid and $522 million cash held by Medibank on disposal.
The GGS reported a gain on sale of $5,521 million. This comprised:
a net gain on sale of $1,644 million being the difference between the proceeds of
$5,685 million and the fair value of the Governments investment in Medibank of
$4,041 million (in Note 5B) and selling costs of $79 million; and
accumulated general government revaluation gains of $3,956 million which were
previously taken direct to reserves and which the AAS requires to be recognised as
a gain on disposal (in Note 5E).
The difference in treatment between the Australian Government and the GGS reflects
Medibanks previous classification as a public financial corporation (PFC). This meant
that Medibank was fully consolidated into the Australian Government on a
line-by-line basis but categorised as a financial equity investment at fair value for the
GGS.
The adjusted financial performance of Medibank, on consolidation in the Australian

Governments financial statements for 2014-15 is detailed below. There is no income
tax expense associated with the sale of Medibank as this is eliminated upon
consolidation.
Financial performance Discontinued operations

2015(a) 2014
$m $m
Revenue from transactions 2,769 6,458

Expenses from transactions 2,619 6,288
Net operating balance 150 170
Other economic flows - included in Operating Result (1) (69)
Net operating result 149 101
67
The contribution to Australian Government cash flows of Medibank after adjusting for
the elimination of transactions with Australian Government entities was as follows:
Cash flows Discontinued operations

2015(a) 2014
$m $m
Net cash flows from operating activities (7) 374

Net cash flows from investing activities 91 (58)
Net cash flows from financing activities - -
Net result 84 316
(a) The 2015 amounts are for the period 1 July 2014 to 24 November 2014.
68
Note 3: Revenue from transactions

Revenue from transactions arise from interactions between the Australian Government
and other entities, including households, private corporations and the not-for-profit
sector and other governments. It excludes gains resulting from changes in price levels
and other changes in the volume of assets. These are disclosed separately in Note 5 as
Other Economic Flows. The total Australian Government revenue and relative
composition of revenue sources were as follows:
Amount 2014-15 Composition

$m
450,000 Income
taxation
400,000 67%
350,000
300,000
250,000
Indirect
200,000 taxation
150,000 25%
100,000
50,000 Sales of
Other goods &
Dividend Interest
0 revenue services
revenue revenue
2013-14 2014-15 2% 4%
1% 1%
Income taxation (refer Note 3A) is the largest source of Australian Government
revenue and refers to the taxation of income, profits and capital gains;
Indirect taxation (refer Note 3A) includes taxes on the sale and use of goods and
services and other taxes. Included within this grouping is the goods and services
tax (GST), customs and excise duties and other taxes levied on particular products
or industries;
Sales of Goods and Services (refer Note 3B) is distinguished from taxation in that
the revenue is received in return for the direct provision of goods and services
(including the provision of regulatory services) to the payer;
Dividend revenue (refer Note 3C) comprise equity distributions received by the
Government Investment Funds and corporations and, at the GGS level, includes
distributions from public corporations (which are eliminated upon consolidation);
Interest revenue (refer Note 3C) refers to income accrued on financial assets such as
deposits, securities other than shares, loans and accounts receivable; and
Other non-taxation revenue (refer Note 3D) includes transaction revenue not
categorised elsewhere, with significant items including the collection of royalties
and the collection of child support payments to pass on to custodial parents.
69
Note 3A: Taxation revenue

General Government Australian Government
2015 2014 2015 2014
$m $m $m $m
Income taxation
Individuals and other withholding taxes
Gross income tax withholding 167,645 157,077 167,645 157,076
Gross other individuals 40,565 37,561 40,565 37,561
less Refunds (27,033) (27,407) (27,033) (27,407)
Total individuals and other withholding taxation 181,177 167,231 181,177 167,230
Fringe benefits tax 4,393 4,285 4,393 4,285
Company tax 65,961 68,612 65,862 68,473
Superannuation funds 5,890 6,147 5,890 6,147
Resource rent taxes 1,382 1,785 1,382 1,785
Total income taxation revenue 258,803 248,060 258,704 247,920
Indirect taxation
Sales taxes
Goods and services tax 56,462 55,517 56,462 55,517
Wine equalisation tax 828 826 828 826
Luxury car tax 540 476 540 476
Total sales taxes 57,830 56,819 57,830 56,819
Excise duty revenue(a) 23,687 25,647 23,687 25,647
Customs duty revenue(a) 10,884 9,282 10,884 9,282
Carbon pricing mechanism - 4,744 - 4,744
Other indirect taxation
Agricultural levies 510 491 510 491
Other taxes 3,295 3,329 3,295 3,329
Total other indirect taxation revenue 3,805 3,820 3,805 3,820
Mirror taxes 503 498 503 498
less Transfers to States in relation to
mirror tax revenue (503) (498) (503) (498)
Mirror tax revenue - - - -
Total indirect taxation revenue 96,206 100,312 96,206 100,312
Total taxation revenue(b) 355,009 348,372 354,910 348,232
(a) The 2014-15 Final Budget Outcome provides a disaggregation of excise and customs duty revenue by
duty type.
(b) Concessions and other forms of tax expenditures constitute revenue foregone and are not reported
above or as an expense (unless available to beneficiaries regardless of whether they are required to pay
tax in which case an expense is recorded). The Australian Government Treasury issues an annual
Tax Expenditures Statement (unaudited), which provides a list of tax expenditures provided by the
Australian Government to individuals and businesses.
Taxation revenue
Taxation revenues are recognised when all of the following three conditions have been
satisfied:
there is a basis establishing the Australian Governments right to receive the

revenue;
it is probable that future economic benefits will be received; and
the amount of revenue to be received can be reliably measured.
70
Estimation of some revenues can be difficult due to impacts of economic conditions

and the timing of final taxable income, hence the Australian Government uses
two bases of recognition:
Economic Transaction Method (ETM) - Revenue is recognised when the

Government, through the application of legislation to taxation and other relevant
activities, gains control over the future economic benefits that arise from taxes and
other statutory charges. Where a taxation revenue is able to be measured reliably
(even in cases where the transactions are yet to occur but are likely to be reported)
the ETM method is used to recognise revenue; or
Taxation Liability Method (TLM) - Revenue is recognised at the earlier of when an

assessment of a tax liability is made, or payment is received. Furthermore, revenue
is recognised when there is sufficient information to raise an assessment but an
event has occurred which delays the issue of the assessment. This method is
permitted when there is an inability to reliably measure taxes when the underlying
transactions or events occur. Revenue recognised under this policy is generally
measured at a later time than would be the case if it were measured under ETM.
The revenue recognition policy adopted by the Australian Government for each major
type of taxation revenue is as follows:
Type of Revenue Basis of revenue recognition

taxation recognition
revenue basis
Income tax TLM Comprise income tax withholding (ITW), other individuals,
individuals Medicare levy and income tax refunds. ITW represents
amounts withheld from payments of remuneration for the
year. Other individuals includes income tax instalments and
final tax returns received during the year. Other individuals
revenue and income tax refunds do not incorporate an
estimate of the tax to be paid or refunded on the final
assessment for the year.
Income tax TLM Comprise amounts of tax payable by companies that relate
companies to instalments and final payments received/raised for current
and former periods. It does not include estimates of revenue
related to the reporting year that will be recognised in annual
income tax returns lodged after the reporting date.
Income tax TLM Superannuation contributions tax is levied on
superannuation superannuation funds based on contributions made by
funds employers. Superannuation fund tax revenue comprise
amounts of tax payable by superannuation funds that relate
to instalments and payments for current and former
reporting years. It does not include estimates of revenue
related to the reporting year that will be recognised in annual
income tax returns lodged after the reporting date.
Petroleum ETM Recognised based on the actual and estimated taxable
resource rent profits in respect to offshore petroleum projects excluding
tax (Resources some of the North-West Shelf production and associated
rent tax) exploration areas, which are subject to excise (included in
excise on petroleum and other fuel products) and royalties.
71
Type of Revenue Basis of revenue recognition

taxation recognition
revenue basis
Goods and ETM Recognised based on the actual liabilities raised during the
services tax year and includes an estimate of those outstanding that
(GST) relate to transactions occurring in the reporting period.
Excise duty ETM Recognised based on the actual and estimated duty
payable. Excise duty becomes payable when certain goods
are distributed for home consumption during the reporting
period.
Customs duty ETM Recognised when imported goods are distributed for home
consumption.
Luxury car tax ETM Recognised at the time the sale (or private import) of a
luxury vehicle occurs within the reporting period and
includes an estimate of amounts outstanding that relate to
transactions occurring in the reporting period.
Wine ETM Recognised when an assessable dealing occurs within the
equalisation reporting period giving rise to a tax liability and includes an
tax estimate of amounts outstanding that relate to transactions
occurring in the reporting period.
Fringe benefits ETM Recognised on fringe benefits provided by employers to
tax (FBT) employees during the reporting period and includes an
estimate of outstanding instalments and balancing payments
for the annual FBT return.
If all taxation revenue had been measured according to the ETM, including those
revenue types currently considered unreliable, the estimated impact on the 2014-15
financial results would be as follows:
Operating statement and balance sheet for 2014-15 Adoption of ETM
2015 2015 2015

Full ETM Difference
$m $m $m
Income
Taxation revenue
Income tax
Individuals and other withholding taxes 181,177 181,759 582
Fringe benefits tax 4,393 4,393 -
Superannuation 5,890 5,528 (362)
Companies 65,862 62,631 (3,231)
Resources rent tax 1,382 1,382 -
Total income tax 258,704 255,693 (3,011)
Total taxation revenue 354,910 351,899 (3,011)
Assets 532,337 601,629 69,292

Liabilities 841,302 903,344 62,042
Net worth (308,965) (301,715) 7,250
72
Penalties and general interest charges (GIC) arising under taxation legislation are
recognised as revenue at the time the penalty and GIC are imposed on the taxpayer
and included within the relevant revenue categories. Generally, subsequent remissions
and write-offs of such penalties and interest are treated as an expense or other
economic flow of the period. Penalties and interest that are imposed by law and
immediately remitted by the Commissioner of Taxation are not recognised as revenue
or expense.
Taxpayers are entitled to dispute amounts assessed by the Government. Where the
Government considers that the probable outcome will be a reduction in the amount of
tax owed by a taxpayer, an allowance for credit amendment (if the disputed debt is
unpaid) or a provision for refund (if the disputed debt has been paid) will be created
and there will be a corresponding reduction in revenue.
Note 3B: Sales of goods and services

2015 2014 2015 2014
$m $m $m $m
Sales of goods 1,547 1,453 1,951 1,895
Rendering of services 3,684 3,645 12,147 11,489
Operating lease rental 44 68 103 111
Other fees from regulatory services 3,700 3,409 3,700 3,409
Total sales of goods and services revenue 8,975 8,575 17,901 16,904
Cost of goods sold 731 552 1,070 894
Sales of goods and services
Revenue from the sale of goods is recognised when:
the risks and rewards of ownership have been transferred to the buyer;
the seller retains neither managerial involvement nor effective control over the
goods;
the revenue and transaction costs incurred can be reliably measured; and
it is probable that the economic benefits associated with the transaction will flow to
the entity.
Revenue from the rendering of services is recognised by reference to the stage of

completion of contracts at the reporting date. The revenue is recognised when:
the amount of revenue, stage of completion and transaction costs incurred can be
reliably measured; and
the probable economic benefits of the transaction will flow to the entity.
73
Fees from regulatory services are designed to cover all or part of the cost of providing
a regulatory function. If the revenue collected is clearly out of all proportion to the
costs of providing the regulatory service, then the fee is classified as taxation revenue.
Fees from regulatory services are recognised when collected or when due and payable
under the relevant legislation.
Note 3C: Interest and dividend income

2015 2014 2015 2014
$m $m $m $m
Interest from other governments
State and Territory debt 21 9 21 9
Housing agreements 116 121 116 121
General purpose advances - - 160 187
Total interest from other governments 137 130 297 317
Interest from other sources
Advances 47 44 47 45
Deposits 104 39 111 54
Bills receivable - 5 27 30
Bank deposits 178 257 240 337
Indexation of HELP receivable and
other student loans 567 408 567 408
Securities 1,208 1,472 2,817 2,711
Other 904 984 393 504
Total interest from other sources 3,008 3,209 4,202 4,089
Total interest 3,145 3,339 4,499 4,406
Dividends
Dividends from other public sector entities 2,324 1,695 - -
Other dividends 3,854 2,410 3,927 2,457
Total dividends 6,178 4,105 3,927 2,457
Total interest and dividend income 9,323 7,444 8,426 6,863
Interest and dividend income
Interest revenue is recognised using the effective interest method. Dividend revenue is
recognised when the right to receive a dividend has been established.
Note 3D: Other sources of non-taxation revenue

2015 2014 2015 2014
$m $m $m $m
Industry contributions 90 75 90 75
Royalties 1,402 1,823 1,402 1,823
Seigniorage 111 112 111 112
Child support payments 1,499 1,507 1,499 1,507
Other 3,904 3,326 3,864 3,338
Total other sources of non-taxation
revenue 7,006 6,843 6,966 6,855
74
Note 4: Expenses from transactions

Expenses from transactions arise from interactions between the Australian
Government and other entities, including households, private corporations, the
not-for-profit sector and other governments. They exclude losses resulting from
changes in price levels and other changes in the volume of assets. These are disclosed
separately in Note 5 as Other Economic Flows. The total Australian Government
expenses and relative composition of expenses are as follows:
$m
500,000 Interest
expenses
450,000 6% Current
and capital
400,000 transfers
64%
350,000
300,000
250,000
200,000
150,000
Gross
100,000
operating
50,000 expenses
30%
0
2013-14 2014-15
Gross operating expenses cover the costs incurred by the Government in the
provision of services, including benefit payments to third parties to provide
services to households (such as Medicare). Included in gross operating expenses
are:
Employee and superannuation expenses (refer Note 4A),
Depreciation and amortisation (refer Note 4B), and
Supply of goods and services (refer Note 4C);
Interest expenses comprise the nominal growth in the Governments unfunded

superannuation liabilities (refer Note 4A), interest incurred on financial liabilities
and the initial discount recognised on the provision of concessional loans
(refer Note 4D); and
Current and capital transfers are unrequited transfers in the form of:
Personal benefits paid directly to individuals or households,
Subsidies to public and private entities to allow them to provide goods or

services at a reduced cost, or
75
Financial assistance in the form of current or capital grants to third parties to

achieve particular government outcomes (refer Note 4E).
Note 4A: Employee and superannuation expenses

2015 2014 2015 2014
$m $m $m $m
Wages and salaries expenses 18,357 18,823 22,282 22,519

Other operating expenses
Leave and other entitlements 2,530 2,614 3,246 3,367
Separations and redundancies 372 580 619 698
Workers compensation premiums and claims 754 740 804 781
Other 2,086 2,083 2,169 2,164
Total other operating expenses 5,742 6,017 6,838 7,010
Superannuation expenses
Superannuation 6,927 6,372 7,324 6,893
Superannuation interest 8,999 8,214 8,999 8,214
Total superannuation expenses 15,926 14,586 16,323 15,107
Total employee and superannuation expense 40,025 39,426 45,443 44,636
Employee benefit accounting policies are disclosed in Note 8F.
Ministerial remuneration
The Australian Government has elected to disclose ministerial remuneration of

Cabinet Ministers. This disclosure is not currently required under the accounting
standards. Ministerial remuneration is limited to Cabinet Ministers because they are
considered the key management personnel of the Australian Government. Cabinet
Ministers are responsible for planning, directing and controlling the activities of the
Australian Government, directly or indirectly. The disclosure includes all Cabinet
Ministers who have served during the financial year. For Cabinet Ministers who serve
only part of the financial year, their ministerial remuneration is pro-rated. Employee
expenses include salary and allowances received or receivable by 20 Cabinet Ministers
totalling $8.7 million during 2014-15 (39 Cabinet Ministers during 2013-14: $8.8 million.
The 2013-14 number included 20 ministers who served under the former Government
which ceased on 18 September 2013).
Ministerial remuneration comprises total salary (including the additional ministerial

component), superannuation contributions, and motor vehicle costs including related
fringe benefits tax. Additional ministerial benefits that are not considered to be for
personal benefit, such as electorate allowance, staff, transport, printing and
communication, as well as costs incurred by portfolio departments on behalf of
Ministers, are excluded from the disclosure. Costs associated with The Lodge and
Kirribilli House are not included, as these are national assets and incur costs regardless
of who uses them. The Life Gold Pass entitlement and accumulation of the entitlement
available for former prime ministers are also excluded. The overall value of these
entitlements is included in employee provisions.
76
The Remuneration Tribunal provides information on the remuneration of Senators and

Members of Parliament, including ministers. This information is available on the
Remuneration Tribunal website.
Note 4B: Depreciation and amortisation expenses

2015 2014 2015 2014
$m $m $m $m
Depreciation
Specialist military equipment 2,872 2,539 2,872 2,539
Buildings 1,462 1,422 1,574 1,530
Other infrastructure, plant and equipment 1,450 1,394 2,198 1,974
Heritage and cultural assets 73 51 73 51
Total depreciation 5,857 5,406 6,717 6,094
Total amortisation 1,005 998 1,503 1,405
Add back Amortisation of non-produced assets (58) (64) (121) (124)
Total depreciation and amortisation expense 6,804 6,340 8,099 7,375
Depreciation
Land, being an asset with an unlimited useful life, is not depreciated. The majority of
buildings, plant, equipment and infrastructure are depreciated on a straight-line basis
over their useful life or over the lesser of the lease term and useful life for selected
leasehold improvements.
Depreciation and amortisation rates applying to each class of depreciable assets are
based on the following useful lives:
2014-15 2013-14
Buildings(a) 1-200 years 1-200 years
Specialist military equipment 1-54 years 1-54 years
Other plant, equipment and infrastructure 1-112 years 1-112 years
Heritage and cultural assets 1-5,000 years 1-5,000 years
(a) This depreciation range includes certain leasehold improvements, which have depreciation rates of up to
50 per cent.
77
Amortisation
Software is amortised on a straight-line basis over its anticipated useful life. Other
intangible assets are amortised from the date they are available for use, unless
classified as an indefinite life intangible (for example, water entitlements).
Amortisation rates applying to each class of intangible asset are based on the following
useful lives:
2014-15 2013-14
Computer software 1-24 years 1-24 years
Other intangibles(a) 1-100 years (b) 1-100 years (b)
(a) Excludes goodwill and indefinite life intangibles.
(b) The useful life of the Hansard digitised data is currently 100 years.
Note 4C: Supply of goods and services

2015 2014 2015 2014
$m $m $m $m
Supply of goods and services 25,812 24,575 29,389 27,750
Operating lease rental expenses 2,555 2,549 2,847 2,844
Health care payments 5,080 5,220 5,080 5,220
Benefits to households in goods and services 44,028 40,943 44,028 40,943
Other 1,814 1,847 1,966 1,999
Total payment for supply of goods
and services 79,289 75,134 83,310 78,756
Operating Leases
Operating lease payments are expensed on a straight-line basis, which is representative

of the pattern of benefits derived from the leased assets.
Benefits to households in goods and services (indirect personal benefits)
Comprise benefits provided to households as social transfers and delivered by a third

party (for example, medical and pharmaceutical benefits). These benefits are reported
separately to personal benefits which comprise current transfers provided directly to
individuals or households, rather than via a third party. Direct and indirect personal
benefit payments are determined in accordance with provisions under social security
law and other legislation.
78
Note 4D: Interest expense

2015 2014 2015 2014
$m $m $m $m
Interest on debt
Government securities 14,473 13,390 14,236 13,148
Loans 10 10 134 143
Taxation overpayments 223 230 223 230
Exchange settlement funds - - 506 342
Deposits 4 - 31 29
Other 34 32 107 138
Total interest on debt 14,744 13,662 15,237 14,030
Discount on concessional instruments 860 1,060 860 1,060
Unwinding of discount and other 314 227 316 234
Finance charges for finance leases 106 101 403 322
Other financing costs 1,280 1,388 1,579 1,616
Total interest expense 16,024 15,050 16,816 15,646
Interest expense
Interest on outstanding borrowings and other finance costs directly related to

borrowings are expensed as incurred. Interest expense includes interest on debt,
discounts on loans and concessional instruments, unwinding of discount of provisions
and amortisation of finance charges for finance leases.
Note 4E: Grants expense

2015 2014 2015 2014
$m $m $m $m
Current grants expense
State and Territory governments 96,418 88,454 96,418 88,454
Local governments - 15 - 15
Private sector 5,669 6,444 5,669 6,444
Overseas 4,622 4,173 4,622 4,173
Non-profit organisations 5,174 3,966 5,174 3,966
Multi-jurisdictional sector 9,985 9,634 9,985 9,634
Other 2,767 3,274 2,699 3,224
Total current grants expense 124,635 115,960 124,567 115,910
Capital grants expense
Mutually agreed write-downs 1,857 2,627 1,857 2,477
Other capital grants
State and Territory governments 6,594 8,765 6,594 8,765
Local governments 410 714 410 714
Private sector - 34 - 34
Multi-jurisdictional sector 101 97 101 97
Other 293 9,122 293 322
Total other capital grants expense 7,398 18,732 7,398 9,932
Total capital grants expense 9,255 21,359 9,255 12,409
Total grants expense 133,890 137,319 133,822 128,319
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Current and capital transfers (grants)
Where no economic benefits are receivable in return for transfers, amounts are
recognised as current transfers. For other transfers, the distinction between current and
capital transfers is based on the nature of the activities or assets for which the transfers
are made. If the activities or assets relate to the acquisition of assets, other than
inventories that will be used in production for one year or more, the transfers are
treated as capital transfers. Otherwise they are treated as current transfers.
Where a transaction or event gives rise to legal, social, political or economic

consequences such that the Australian Government has little discretion to avoid the
sacrifice of future economic benefits, a liability and expense is recognised. In other
circumstances, grants are recognised to the extent that the services required to be
performed by the grantee have been performed or the grant eligibility criteria have
been satisfied. Education grants to and through the states, territories and other
education providers, such as universities, are recognised on a due and payable basis.
Capital transfers also include mutually agreed write-downs. These transactions occur
when both parties agree to the write-off of an amount owed to the Australian
Government, rather than the Australian Government unilaterally deciding to
write-down or write-off a debt. Mutually agreed write-downs include, for example, the
remission of a penalty raised for overdue taxes receivable. Mutually agreed
write-downs are recorded as an expense in the calculation of fiscal balance.
The 2014-15 Final Budget Outcome provides a disaggregation of current and capital
grants to state and territory governments, and local governments.
Note 4F: Expenses by function

2015 2014 2015 2014(a)
$m $m $m $m
General public services 24,533 34,091 25,402 25,888
Defence 23,693 22,146 23,771 22,114
Public order and safety 4,443 4,369 4,527 4,380
Education 31,100 29,669 31,100 29,669
Health 65,696 63,791 65,675 63,793
Social security and welfare 147,785 140,561 147,700 140,472
Housing and community amenities 4,835 6,044 4,836 6,044
Recreation and culture 3,533 3,749 3,529 3,748
Fuel and energy 6,799 6,749 6,799 6,749
Agriculture, forestry and fishing 2,412 2,384 2,409 2,384
Mining, manufacturing and construction 3,550 3,451 3,648 3,547
Transport and communication 6,432 8,408 16,735 17,855
Other economic affairs 10,045 10,838 10,016 10,862
Other purposes 82,872 75,571 82,877 75,608
Total expenses 417,728 411,821 429,024 413,113
(a) The 2013-14 Australian Government comparatives have been updated to allocate the elimination of
inter-sector transactions by function. Previously, these eliminations were allocated to Other purposes.
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The functional classification of expenses shows the total accrual outlays according to
the socioeconomic objectives that the Australian Government aims to achieve.
The following table provides a description of each function.
Function Description
General public Includes legislative and executive affairs, financial and fiscal affairs,
services foreign affairs, foreign economic aid, general research, general economic
and social planning, statistical services, and government superannuation
benefits.
Defence Includes military and civil defence affairs, foreign military aid and defence
research.
Public order and Includes administration of the federal legal system and the provision for
safety legal services, including legal aids, to the community. Public order and
safety expenses also include law enforcement and intelligence activities,
and the protection of Australian Government property.
Education Includes primary and secondary education, university and other higher
education, technical and further education, preschool and special
education, and transportation of students.
Health Includes general hospitals, repatriation hospitals, mental health
institutions, nursing homes, special hospitals, hospital benefits, medical
benefits, medical clinics and practitioners, dental clinics and practitioners,
maternal and infant health, ambulance services, school and other public
health services, pharmaceuticals, medical aids and appliances, and
health research.
Social security Includes sickness benefits, benefits to ex servicemen and their
and welfare dependants, invalid and other permanent disablement benefits, old age
benefits, widows, deserted wives, divorcees and orphans benefits,
unemployment benefits, family and child benefits, sole parent benefits,
family and child welfare, and aged and handicapped welfare.
Housing and Includes housing and community development, water supply, household
community garbage and other sanitation, sewerage, urban stormwater drainage,
amenities protection of the environment, and street lighting.
Recreation and Includes public halls and civic centres, swimming pools and beaches,
culture national parks and wildlife, libraries, creative and performing arts,
museums, art galleries, broadcasting, and film production.
Fuel and energy Includes coal, petroleum, gas, nuclear affairs, and electricity.
Agriculture, Includes agricultural land management, agricultural water resources
forestry and management, agricultural support schemes, agricultural research and
fishing extension services, forestry and fishing.
Mining, Includes activities relating to prospecting, mining and mineral resources
manufacturing and development, manufacturing activities and research into manufacturing
construction methods, materials and industrial management, and activities associated
with the building and construction industry.
Transport and Includes road construction, road maintenance, parking, water transport,
communication rail transport, air transport, pipelines, multi mode urban transit systems,
and communications.
Other economic Includes storage, saleyards, markets, tourism and area promotion, and
affairs labour and employment affairs.
Other purposes Includes public debt transactions, general purpose inter government
transactions, and natural disaster relief.
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Note 5: Other economic flows

Included within other economic flows are the changes in the volume or value of
assets and liabilities that do not result from transactions. This includes impairment
write-downs (unless mutually agreed with the counter-party), fair value movements,
changes in assumptions underpinning actuarial assessments, and foreign exchange
gains or losses. For government reporting, these flows are distinguished from
transactions as they do not involve an interaction between entities and are often not
related to economic activities (e.g. production, income generation, consumption,
wealth accumulation).
Noting that other economic flows comprise both gains and losses, the predominant
sources of other economic flows are as follows:
$million
15,000 2013-14
10,000 2014-15
5,000
-5,000
-10,000
-15,000
-20,000 Other equity

Superannuation
Net swap
write-downs
Net gain/(loss) on
Non-financial
Net foreign
gains/(losses)
revaluations
revaluations
interest
exchange
revaluation
sale of assets
Other
Net
Of the above, the following flows are included in the measurement of the accounting
operating result. The remaining movements are adjusted directly to equity.
Net write-down of assets (refer Note 5A) comprised the revaluation and
impairment of financial and non-financial assets;
Net gain/(loss) from the sale of assets (refer Note 5B) which is the difference
between the proceeds and the carrying amount of assets sold after selling costs;
Net foreign exchange gains/(losses) (refer Note 5C) comprised unrealised

gains/losses from the translation of assets and liabilities held overseas;
82
Net swap interest gains/(losses) (refer Note 5D) comprised interest accrued or
incurred on swaps and other derivatives (a form of financing transaction); and
Other gains/(losses) (refer Note 5E) which are other gains/losses not classified
elsewhere but which are included in the calculation of the operating result for
accounting purposes.
83
Note 5A: Net write-down of assets (including bad and doubtful debts)
2015 2014 2015 2014
$m $m $m $m
FINANCIAL ASSETS
Receivables - bad and doubtful debts
Goods and services 101 99 114 102
Taxes due 3,077 4,790 3,077 4,790
Other 681 719 681 719
Total receivables - bad and doubtful debts 3,859 5,608 3,872 5,611
Net write-down/(reversal) and impairment arising
from the revaluation of investments and other
financial assets 69 (159) 64 (170)
Total financial write-down and impairment 3,928 5,449 3,936 5,441
NON-FINANCIAL ASSETS
Inventories 419 379 427 388
Land 2 - (2) -
Buildings 67 58 53 63
Specialist military equipment 907 466 907 467
Other infrastructure, plant and equipment 148 177 222 211
Intangibles (90) 2 53 16
Net write-down, impairment and fair
value losses arising from the revaluation
of non-financial assets 1,484 1,088 1,691 1,151
Total net write-down and impairment
of assets and fair value losses 5,412 6,537 5,627 6,592
Impairment of taxes due
Impairment losses for large tax receivables (greater than $10 million) are estimated on
an individual assessment basis, with a default percentage impairment rate (based on
historical collectability rates) applied to debts where the taxpayer is insolvent or has
entered into a payment arrangement. The remaining tax receivables (less than
$10 million) impairment loss is derived using an automated model which allows large
debt populations to be examined and provides for statistical credibility, in conjunction
with interpretive judgement.
Impairment of non-financial assets
Non-financial assets were assessed for impairment at 30 June 2015. Where indications
of impairment exist, the assets recoverable amount is estimated and an impairment
adjustment made if the assets recoverable amount is less than its carrying amount.
The recoverable amount of an asset is the higher of its fair value less cost to sell and its
value in use. Where the future economic benefit of an asset is not primarily dependent
on the assets ability to generate future cash flows, and the asset would be replaced if
the Australian Government was deprived of the asset, its value in use is taken to be its
depreciated replacement cost.
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Note 5B: Net gain/(loss) from the sale of assets

2015 2014 2015 2014
$m $m $m $m
FINANCIAL ASSETS
Net gains/(losses) from sale of investments 6,964 6,111 6,881 6,122
Net gains/(losses) from sale of receivables - - - -
Net gains/(losses) - financial assets 6,964 6,111 6,881 6,122
COMMONWEALTH ENTITIES
Proceeds from sale of entities 5,686 - 5,686 -
less written down value of entities (4,034) - (1,256) -
Net gains/(losses) - Entities(a) 1,652 - 4,430 -
NON-FINANCIAL ASSETS
Proceeds from sale of land and buildings 211 135 286 358
less selling costs of sale of land and buildings (4) (8) (5) (44)
less written down value of land and buildings sold (258) (141) (282) (171)
Net gains/(losses) - land and buildings (51) (14) (1) 143
Proceeds from sale of investment properties 15 15 15 17
less selling costs of investment properties (1) - (1) -
less written down value of investment properties (15) (16) (15) (16)
Net gains/(losses) - investment properties (1) (1) (1) 1
Proceeds from sale of infrastructure, plant
and equipment 47 77 50 100
less selling costs of infrastructure, plant
and equipment (11) (11) (11) (11)
less written down value of infrastructure, plant and
equipment sold (53) (84) (59) (104)
Net gains/(losses) - I,P&E (17) (18) (20) (15)
Proceeds from sale of intangibles 2,144 5 2,144 5
less selling costs of intangibles - - - -
less written down value of intangibles (16) (7) (16) (7)
Net gains/(losses) - intangibles 2,128 (2) 2,128 (2)
less written down value of heritage and cultural assets (1) (2) (1) (2)
Net gains/(losses) - heritage and cultural assets (1) (2) (1) (2)
Proceeds from sale of biological assets 15 9 15 9
less selling costs of biological assets - - - -
less written down value of biological assets (15) (9) (15) (9)
Net gains/(losses) - biological assets - - - -
Total net gains/(losses) - non-financial assets 2,058 (37) 2,105 125
Net gains/(losses) from sale of assets 10,674 6,074 13,416 6,247
Add back selling costs included in expenses 16 19 17 55
Net gains/(losses) from sale of assets in other
economic flows 10,690 6,093 13,433 6,302
(a) Including gain on sale of Medibank Private Limited, excluding selling costs. In 2014-15, these costs
comprised $1.5 million in employee costs and $77.3 million in supplier costs which are reported within
the respective categories refer Note 2.
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Note 5C: Net foreign exchange gains/(losses)

2015 2014 2015 2014
$m $m $m $m
Net foreign exchange gains/(losses)
Non-speculative (2,335) (402) 3,808 (247)
Net foreign exchange gains/(losses) (2,335) (402) 3,808 (247)
Foreign currency translation

Transactions are translated to Australian dollars at the rate of exchange applicable at
the date of the transaction. Balances and investments are translated at the exchange
rates applicable at balance date.
Note 5D: Net swap interest gains/(losses)

2015 2014 2015 2014
$m $m $m $m
Net swap interest
Net swap interest revenue 1,025 612 1,114 698
Net swap interest expense (2,002) (1,136) (2,049) (1,178)
Net swap interest received (977) (524) (935) (480)
Swap interest
Consistent with the ABS GFS Manual, interest on swaps and other derivatives is
classified as a financing transaction and recorded in other economic flows.
Note 5E: Other gains/(losses)

2015 2014 2015 2014
$m $m $m $m
Fair value gains - financial instruments 5,694 1,005 1,698 1,115
Fair value gains - biological assets 22 11 22 11
Fair value gains - investment properties 2 8 9 22
Net actuarial gains/(losses) (1,141) (1,584) (1,141) (1,584)
Superannuation past service cost and
gain/(loss) from settlements - (7,797) - (7,797)
Other 129 35 129 35
Total other gains/(losses) 4,706 (8,322) 717 (8,198)
Other gains/(losses)
Other gains/(losses) primarily comprise:
Fair value movements in financial assets and liabilities categorised as held at fair
value through profit and loss (refer Note 12B);
The actuarial revaluation of provisions, other than superannuation; and
Gains resulting from the derecognition of financial assets previously categorised as
available for sale (refer Note 12B) with the gain equal to the accumulated fair
value movements previously taken direct to reserves.
86
Note 6: Fair value measurement
(a) Fair value measurement
The following tables provide an analysis of assets and liabilities that are measured at fair value.
Australian Government
2015 2014
Level 1 (a) Level 2 (b) Level 3 (c) Total (d) Level 1 (a) Level 2 (b) Level 3 (c) Total (d)
$m $m $m $m $m $m $m $m
Financial assets:
Receivables - 1,931 33,606 35,537 - 1,949 27,583 29,532
Investments, loans and placements 58,903 42,324 54,251 155,478 59,627 41,481 44,235 145,343
Equity investments 41,871 7 1,954 43,832 38,346 120 1,677 40,143
Total financial assets 100,774 44,262 89,811 234,847 97,973 43,550 73,495 215,018
Non-financial assets:
10,938 10,288
87
Land - 9,917 1,021 - 9,303 985

Buildings - 3,269 21,496 24,765 - 2,876 20,653 23,529
Plant, equipment and infrastructure - 1,091 16,096 17,187 - 969 15,746 16,715
Heritage and cultural assets - 7,717 3,614 11,331 - 8,161 2,659 10,820
Other 5 555 - 560 11 543 - 554
Total non-financial assets 5 22,549 42,227 64,781 11 21,852 40,043 61,906

Total fair value measurements of assets in the
statement of financial position 100,779 66,811 132,038 299,628 97,984 65,402 113,538 276,924
(a) Fair value measurement (continued)

2015 2014
$m $m $m $m $m $m $m $m
Financial liabilities:
Government securities 363,907 40,114 - 404,021 314,024 32,578 - 346,602
Other - 3,720 1,609 5,329 34 2,668 1,919 4,621
Total financial liabilities 363,907 43,834 1,609 409,350 314,058 35,246 1,919 351,223
Total fair value measurements of liabilities in the

(a) Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at measurement date.
(b) Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability.
(c) Level 3: Unobservable inputs for the asset or liability.
(d) This excludes buildings and plant, equipment and infrastructure at cost, including assets under construction and assets which are measured using depreciated
88
historical cost as a surrogate for fair value. These are disclosed in Note 7D. The comparatives have been adjusted to remove assets at cost.
General Government
2015 2014
$m $m $m $m $m $m $m $m
Financial assets:
Receivables - 1,205 32,434 33,639 - 1,243 26,727 27,970
Investments, loans and placements 745 68,809 54,010 123,564 3,883 63,016 43,757 110,656
Equity investments 41,872 7 41,363 83,242 38,159 18 37,075 75,252
Total financial assets 42,617 70,021 127,807 240,445 42,042 64,277 107,559 213,878
Non-financial assets:
Land - 9,110 830 9,940 - 8,450 792 9,242
Buildings - 2,584 20,446 23,030 - 2,788 19,713 22,501
Plant, equipment and infrastructure - 1,089 11,051 12,140 - 963 10,845 11,808
Heritage and cultural assets - 7,717 3,614 11,331 - 8,161 2,659 10,820
Other 5 355 - 360 9 305 - 314
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Total non-financial assets 5 20,855 35,941 56,801 9 20,667 34,009 54,685
Total fair value measurements of assets in the

Financial liabilities:

Government securities 363,908 40,113 - 404,021 318,691 32,578 - 351,269
Other - 6,897 1,483 8,380 33 530 1,667 2,230
Total financial liabilities 363,908 47,010 1,483 412,401 318,724 33,108 1,667 353,499
Total fair value measurements of liabilities in the

(a) Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at measurement date.
(b) Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability.
(c) Level 3: Unobservable inputs for the asset or liability.
(d) This excludes buildings and plant, equipment and infrastructure at cost, which predominantly comprise assets under construction.
(b) Valuation technique and inputs for Level 2 and Level 3 fair value
measurements
The following table summarises the valuation techniques used by entities in
determining the values of Level 2 and Level 3 categorised assets and liabilities.
Valuation Technique Description
Cost approach The amount required currently to replace the service capacity of an asset.
Depreciated replacement The amount a market participant would be prepared to pay to acquire or
cost (DRC) construct a substitute asset of comparable utility, adjusted for obsolescence.
Obsolescence is determined based on professional judgement regarding
physical, economic and external obsolescence factors relevant to the asset
under consideration.
Income approach / Converts future amounts (cash flow or income and expenses) to a single current
Discounted cash flows (i.e. discounted) amount. The fair value measurement is determined on the basis
of the value indicated by current market expectations about those future
amounts.
Market approach Market approach seeks to estimate the current value of an asset with reference
to recent market evidence including transactions of comparable assets within
local second-hand markets.
Net assets of entities The value of the companys assets less the value of its liabilities.
The following table summarises the inputs used by entities:

Input Used Description
Cost of new assets The amount a market participant would pay to acquire or construct a new
substitute asset of comparable utility.
Per square metre cost The square metre cost of new or replacement assets.
Consumed economic Physical deterioration, functional or technical obsolescence and conditions of the
benefit economic environment specific to the asset.
Capitalisation rate Rate of return on a real estate investment property based on the income that the
property is expected to generate.
Market transactions Market transactions of comparable assets, adjusted by a small amount to reflect
differences in price sensitive characteristics (eg. size, condition etc).
Adjusted market Market transactions of comparable assets, involving significant professional

transactions judgement to adjust for other factors (eg. economic conditions) and their impact
on price sensitive characteristics.
Principal due The amount of the prinicpal remaining to be repaid.
Discount rate Rate at which cash flows are discounted back to the value at measurement date.
Future cash flows The future predicted cash flows of the asset.
Foreign exchange rates Rates used to convert foreign currencies into Australian dollars.
Weighted average cost of The average rate of return a company is expected to pay to all its security
capital (WACC) holders to finance its assets.
Net assets of entities The value of the companys assets less the value of its liabilities.
90
The valuation techniques and inputs have been applied to the various classes of assets
and liabilities as follows:
Receivables
Receivables categorised as Level 2 and Level 3 have been valued using a discounted
cash flow approach. The primary inputs include principal due and the discount rate.
Level 3 receivables are differentiated from Level 2 in that the majority (by value) are
calculated each year by actuarial assessment. The two main measures impacting on the
calculation are the face value of the debt not expected to be repaid and the fair value of
the remaining receivable, calculated as the present value of projected future cash
flows. The remaining balance of the Level 3 receivables have been valued consistent
with previous years, using professional valuation advice.
These balances are sensitive to changes in the underlying assumptions, including the
discount rate. For example, the Governments largest receivable, Higher Education
Loan Programme loans, are sensitive to changes in the future Consumer Price Index
(CPI) growth, the discount rate (yield curve) and debt not expected to be repaid.
Investments, loans and placements
Investments, loans and placements categorised as Level 2 have been valued using a
market approach based on observable market transactions. Those categorised as
Level 3 use the following techniques:
Category Valuation technique(s) Inputs used

IMF quota 3 Cost approach Foreign exchange rates
Collective investment vehicles 3 Discounted cash flow Discount rate
Other interest bearing securities 3 Discounted cash flow Discount rate

Other 3 Net assets of entities Net assets of entities
Investments, loans and placements categorised as Level 3 that are valued using the net
assets technique have been based on either the latest available audited accounts of
those entities or internal management accounts because this is the most relevant
available information at the end of the period. This information is an observable input.
Due to the diverse nature of the collective investment vehicles, it is not possible to
provide a range of inputs and associated sensitivity analysis for those investments of
the Future Fund Management Agency.
For the IMF quota investment, the value of shares are held in foreign currency and
converted to an Australian dollar equivalent for inclusion in the financial statements.
This information is an observable input.
91
Equity investments
Equity investments categorised as Level 2 have been valued using a market approach
based on observable market transactions. Those categorised as Level 3 use the
following techniques:

Shares 3 Values of shares held Foreign exchange rates
Net assets of entities Net assets of entities
Investment in public corporations 3 Net assets of entities Net assets of entities
Discounted cash flow WACC
Equity accounted investments 3 Net assets of entities Net assets of entities
GGS investments in public corporations that have been valued using a discounted net
cash flow technique are assumed to be a cash generating unit. Cash flow projections
for a forecast period and terminal year are based on management corporate plans and
have been discounted using a WACC. A decrease or increase of 0.4 per cent in the
discount rate used in the WACC calculations would result in an approximate
+/- $0.2 billion movement respectively in the value of the assets.
For international shares held by the Treasury, the value is held in foreign currency and
converted to an Australian dollar equivalent for inclusion in the financial statements.
This information is an observable input.
Financial liabilities
Financial liabilities categorised as Level 2 have been valued using a market approach
based on observable market transactions. Those categorised as Level 3 use the
following techniques:

Other
Loans 3 Market approach Adjusted market transaction
Other debt 3 Market approach Adjusted market transaction
Payables 3 Discounted cash flow Discount rate
Bond rate
Financial liabilities categorised as Level 3 have had their fair value determined using
market interest rates and valuation techniques that incorporate discounted cash flows
or adjusted market transactions. They have been classified Level 3 because they have
either complex interest rate formulas that include foreign exchange rates, a variety of
discount rates, use the Nikkei index or they have knockout or callable features. The
inputs are considered observable.
92
Non-financial assets categorised as Level 2 and 3 have been valued using the following
techniques:
Land 2 Market approach Market transactions
Income Approach Future cash flows
3 Market approach Adjusted market transaction
Income Approach Future cash flows
Buildings 2 Market approach Market transactions
2 Income approach Market transactions
2 Cost approach Replacement cost of new assets
Market transactions
3 Depreciated replacement cost Replacement cost of new assets
Consumed economic benefit
3 Income approach Capitalisation rate
Per square metre cost
Other 2 Market approach Replacement cost of new assets
Infrastructure Market transactions
Plant and 2 Cost approach Replacement cost of new assets
Equipment Consumed economic benefit
Heritage and 2 Market approach Market transactions
cultural assets 2 Cost approach Replacement cost of new assets
Other 2 Market approach Market transactions
Capitalisation rate
Future earnings
Government entities engage professional valuers to undertake comprehensive

valuations of these classes of non-financial assets as specified in their respective
accounting policy notes. Valuations are conducted with sufficient frequency to ensure
that the carrying amounts of assets do not differ materially from the assets fair values
as at the reporting date. Professional valuers were engaged as required.
Level 3 non-financial assets valued using the market approach utilise market
transactions of similar assets adjusted using professional judgement for each
individual assets characteristics to determine fair value. Non-financial assets that do
not transact with enough frequency and transparency to develop objective opinions of
value from observable market evidence have been valued utilising the depreciated
replacement cost approach, unless this cannot be reliably calculated.
93
(c) Reconciliation for recurring Level 3 fair value measurements

The following tables provide reconciliations for the movement in balances for assets and liabilities classified as Level 3.
Financial
Financial Assets Non-Financial Assets
Liabilities
Investments, Heritage and

loans and Equity cultural
Receivables placements investments Land Buildings Other IPE assets Other
$m $m $m $m $m $m $m $m
Opening balance at 1 July 2013 24,767 38,932 1,745 1,000 19,264 15,720 2,471 419
Purchases / Payments 6,511 10,062 210 1 2,482 708 28 749
Sales / Repayments (2,005) (9,543) (222) (1) (24) (49) - (482)
Gains and losses recognised in profit or
loss (922) 78 21 (2) (1,406) (1,319) (21) (149)
94
Gains and losses recognised in equity (164) 4,857 9 (12) 200 219 179 (8)
Transfers in / (out) of level 3(a) (604) (151) (86) (1) 137 467 2 1,390
Closing balance at 30 June 2014 27,583 44,235 1,677 985 20,653 15,746 2,659 1,919
Purchases / Payments 8,233 14,128 220 2 1,500 2,018 30 108
loss (114) 616 128 4 (1,440) (1,643) (46) 122
Gains and losses recognised in equity - 8,336 32 39 435 241 (135) -
Transfers in / (out) of level 3(a) - 433 89 - 397 (215) 1,106 (8)
Closing balance at 30 June 2015 33,606 54,251 1,954 1,021 21,496 16,096 3,614 1,609
(a) Transfers between levels are determined on an individual entity basis and usually occur when there has been a change to the valuation technique or inputs used to
determine the fair value measurement.
General Government
Financial
Financial Assets Non-Financial Assets
Liabilities
Investments, Heritage and
loans and Equity cultural
Receivables placements investments Land Buildings Other IPE assets Other
$m $m $m $m $m $m $m $m
Opening balance at 1 July 2013 23,984 38,519 26,257 806 18,385 10,958 2,471 -
Purchases / Payments 6,288 9,892 3,403 1 2,410 652 28 749
loss (921) 57 21 (1) (1,359) (1,048) (21) (136)
Gains and losses recognised in equity (164) 4,892 7,715 (12) 172 239 179 -
Transfers in / (out) of level 3(a) (604) (151) (86) (1) 121 93 2 1,390
Purchases / Payments 7,945 13,995 5,211 1 1,402 1,490 30 107
95
Sales / Repayments (1,960) (13,465) (1,739) - (21) (48) - (389)

loss (278) 607 (4,007) (1) (1,406) (1,328) (46) 106
Gains and losses recognised in equity - 8,363 4,838 38 361 301 (135) -
Transfers in / (out) of level 3(a) - 753 (15) - 397 (209) 1,106 (8)

(a) Transfers between levels are determined on an individual entity basis and usually occur when there has been a change to the valuation technique or inputs used to
determine the fair value measurement.
Note 7: Assets
Assets are probable future economic benefits obtained or controlled by an Australian
Government entity as a result of past transactions and activities undertaken, and other
events. These include financial assets such as deposits, loans and investments, and
non-financial assets such as land, buildings and inventories. The total Australian
Government assets and relative composition of assets are as follows:

$m Investments,
600,000 loans & 48%
placements Equity
investments
500,000 8%
400,000
300,000
Receivables
& accrued
200,000 revenue
8%
100,000 27%
Advances Non-financial
paid Cash &
0 1% assets
8% deposits
2013-14 2014-15
Cash and deposits include cash on hand or at bank and short-term deposits.
Advances paid (refer Note 7A) include loans receivable and are predominantly
provided for policy purposes such as student loans;
Other receivables and accrued revenue (refer Note 7A) include statutory amounts
due for the collection of tax or the recovery of benefits, and contractual amounts
due for the provision of goods and services or other arrangements;
Investments, loans and placements (refer Note 7B) comprise securities and other
non-equity investments held for liquidity or policy purposes;
Equity investments (refer Note 7C) cover shares held by the Government
Investment Funds and corporations and, at the GGS level, include the investment in
public corporations (which are eliminated upon consolidation); and
Non-financial assets comprise the Governments holdings of land and buildings,

plant, equipment and infrastructure, heritage and cultural assets, investment
properties and intangibles (refer Note 7D). Non-financial assets also includes
inventories for sale, use or distribution (refer Note 7E) and other non-financial
assets (refer Note 7F).
96
Note 7A: Advances paid and receivables

2015 2014 2015 2014
$m $m $m $m
Advances paid
Loans to State and Territory governments 3,146 2,502 3,146 2,502
Higher Education Loan Programme 30,445 25,147 30,445 25,147
Student Financial Supplement Scheme 531 604 531 604
Other 6,771 6,015 7,883 6,810
less Provision for doubtful debts (235) (228) (236) (229)
Total advances paid 40,658 34,040 41,769 34,834
Other receivables
Goods and services receivable 895 817 1,686 1,827
Recoveries of benefit payments 4,206 3,635 4,206 3,635
Taxes receivable 35,441 36,965 35,434 36,960
Other financial assets 25 55 324 300
Other 6,910 6,126 4,556 5,057
less Provision for doubtful debts - Goods
and services and other (739) (1,958) (754) (1,978)
less Provision for doubtful debts - Personal
benefits receivable (766) (675) (766) (675)
less Provision for doubtful debts - Taxes
receivable (13,107) (14,001) (13,107) (14,001)
less Provision for credit amendments (3,704) (2,215) (3,704) (2,215)
Total other receivables 29,161 28,749 27,875 28,910
Accrued revenue
Accrued taxation revenue 12,785 12,775 12,785 12,775
Other accrued revenue 389 341 548 482
Total accrued revenue 13,174 13,116 13,333 13,257
Other receivables and accrued revenue 42,335 41,865 41,208 42,167
Total advances paid and receivables 82,993 75,905 82,977 77,001
Advances paid and receivables

maturity schedule
Not later than one year 35,977 35,958 34,821 36,199
Later than one year 47,016 39,947 48,156 40,802
Total advances paid and receivables
by maturity 82,993 75,905 82,977 77,001
Advances (loans)
Advances are recognised initially at fair value plus transaction costs and subsequently
measured at amortised cost using the effective interest rate method, less any
impairment loss, unless these loans have been designated as held at fair value through
profit or loss. Interest is recognised on loans evenly in proportion to the amount
outstanding over the period to repayment. Loans designated as held at fair value
through profit or loss include the Higher Education Loan Programme and certain
concessional loans.
97
Other receivables and accrued revenue
Trade debtors, bills of exchange, promissory notes and other receivables are initially
recorded at the fair value of the amounts to be received and are subsequently
measured at amortised cost using the effective interest rate method, less any
impairment loss. Other accrued revenue is recognised when a service has been
provided but has not been invoiced. Accrued revenue is recognised at the nominal
amounts due. Taxation related accounting policies are disclosed in Note 3A.
Collectability of debts is reviewed at balance date. An allowance is made when
collection of the debt is judged to be less, rather than more, likely. The following tables
provide a reconciliation of the movement in the provision for doubtful debts,
excluding those associated with statutory receivables.
Reconciliation of the allowance for doubtful debts(a)

Australian Government Advances Goods and Other Total
and loans Services
$m $m $m $m
Opening balance 1 July 2013 (30) (106) (1,682) (1,818)
less Amounts written off (5) (52) (2) (59)
less Amounts recovered and reversed - (11) (24) (35)
plus Amount recognised in net surplus (5) (80) (118) (203)
plus Other movement (199) (44) (37) (280)
Closing balance 30 June 2014 (229) (167) (1,811) (2,207)
less Amounts recovered and reversed (1) (38) (4) (43)
plus Amount recognised in net surplus 7 (95) (1) (89)
plus Other movement(b) (31) (2) 1,229 1,196
Closing balance 30 June 2015 (236) (179) (575) (990)
General Government Advances Goods and Other Total

and loans Services
$m $m $m $m
Opening balance 1 July 2013 (24) (90) (1,682) (1,796)
less Amounts recovered and reversed - (9) (24) (33)
plus Amount recognised in net surplus (4) (73) (118) (195)
plus Other movement (205) (44) (36) (285)
Closing balance 30 June 2014 (228) (148) (1,810) (2,186)
less Amounts recovered and reversed (1) (31) (4) (36)
plus Amount recognised in net surplus 7 (93) (1) (87)
plus Other movement(b) (31) (1) 1,228 1,196
Closing balance 30 June 2015 (235) (164) (575) (974)
(a) Excludes statutory receivables such as taxes receivable and personal benefits recoverable. Includes
$1,200 million reversal of previous impairment write-down for the Higher Education Superannuation
programme following agreement with the NSW Government that NSW will resume making payments to
eligible NSW universities to meet its share of superannuation expenses.
98
Note 7B: Investments, loans and placements

2015 2014 2015 2014
$m $m $m $m
Gold - - 3,915 3,584
Deposits 38,268 30,866 5,890 6,512
Government securities 2 233 138,649 125,620
Residential mortgage backed securities(a) 4,288 6,060 4,288 6,060
Debentures - - - 859
International Monetary Fund quota 5,913 5,306 11,824 9,995
Defined benefit superannuation plan assets - - 266 81
Collective investment vehicles 45,121 32,293 45,121 32,293
Other interest bearing securities 29,661 31,550 29,661 31,550
Other 13,123 11,303 14,847 13,222
Total investments, loans and placements 136,376 117,611 254,461 229,776
(a) Investments in residential mortgage-backed securities are to support competition in the residential
mortgage market and to meet government policy objectives. Residential mortgage-backed securities
held for investment purposes are classified elsewhere.
Investments, loans and placements
Gold holdings (including gold on loan to other institutions) are valued at market value
at balance date. The Australian Government measures gold at the bid price.
Depending on the type of instrument, deposits are recognised at either nominal or

market value. Interest is credited to revenue as it accrues. Deposits have varying terms
and rates of interest.
Investments in domestic and foreign government securities, except those contracted

for sale under repurchase agreements, are classified by the Reserve Bank of Australia
(RBA) as at fair value through profit or loss. Securities purchased and contracted for
sale under repurchase agreements are classified as loans and receivables and valued
at amortised cost. The difference between the purchase and sale price is accrued over
the term of the agreement and recognised as interest revenue.
The IMF quota represents Australias membership subscription to the IMF. The
investment is denominated in special drawing rights (SDR) and is valued at the
Australian dollar equivalent. SDR is an international type of monetary reserve made
up of a basket of national currencies created by the IMF.
The Future Fund employs collective investment vehicles (CIVs) as part of its
investment strategy. Investments in CIVs are recorded at fair value on the date which
consideration is provided to the contractual counterparty under the terms of the
relevant subscription agreement.
Other interest bearing securities are primarily held by the Australian Government
investment funds (refer Note 12B) and include negotiable certificates of deposit,
mortgage and asset backed securities, bank bills and corporate debt securities.
99
Note 7C: Equity investments

2015 2014 2015 2014
$m $m $m $m
Investments - Shares 42,976 39,296 43,377 39,933
Investment in public corporations 39,810 35,745 - -
Equity accounted investments 710 535 712 544
Total equity investments 83,496 75,576 44,089 40,477
Equity investments
At the whole of government level, equity investments primarily consist of the Future
Funds holdings of listed equities and listed managed investment schemes. These
investments are designated as financial assets through profit or loss on acquisition.
At the GGS level, equity investments also include the Australian Governments
ownership interest in public corporations in the public non-financial corporation
(PNFC) and PFC sectors. The investments are eliminated at whole of government level.
Where the public corporation is a government business enterprise whose principal
function is to engage in commercial activities in the private sector, the investment is
measured at fair value, applying a discounted cash flow technique. Investments in
other public corporations are measured as the Australian Governments proportional
interest in the net assets of the public corporation as at the end of the reporting period.
100
Note 7D: Land and buildings, plant, equipment and infrastructure, heritage and cultural assets and intangibles
Australian Government Heritage
Specialist Other plant, and
military equipment and cultural Investment Computer Other
Land Buildings equipment infrastructure assets property software intangibles Total
Item $m $m $m $m $m $m $m $m $m
Gross book value 109 3,540 77,387 12,091 5 - 10,748 4,674 108,554
Accumulated depreciation/amortisation - (66) (36,144) (1,816) - - (5,671) (1,215) (44,912)
At Cost 109 3,474 41,243 10,275 5 - 5,077 3,459 63,642
Gross book value 10,287 26,999 - 20,051 10,876 375 - - 68,588

Accumulated depreciation/amortisation - (3,470) - (3,336) (56) - - - (6,862)
At Fair Value 10,287 23,529 - 16,715 10,820 375 - - 61,726
Net book value at 30 June 2014 10,396 27,003 41,243 26,990 10,825 375 5,077 3,459 125,368
Gross book value 15 3,224 81,186 15,359 1 - 11,081 4,601 115,467

Accumulated depreciation/amortisation - (111) (38,534) (2,031) - - (6,002) (1,002) (47,680)
101
At Cost 15 3,113 42,652 13,328 1 - 5,079 3,599 67,787
Gross book value 10,938 27,833 - 20,797 11,445 387 - - 71,400

At Fair Value 10,938 24,765 - 17,187 11,331 387 - - 64,608

Australian Government assets at fair value Revaluation period
Assets held at fair value as at 30 June 2015 were based on valuations conducted in the following periods:
2013-14 or earlier 283 1,386 - 3,114 1 - - - 4,784
2014-15 10,655 23,379 - 14,073 11,330 387 - - 59,824
Assets at fair value at 30 June 2015 10,938 24,765 - 17,187 11,331 387 - - 64,608
Australian Government assets at fair value Valuation details

Details pertaining to valuations can be found in the audited financial statements of
individual Australian Government controlled entities. During 2014-15, material
revaluations occurred within the following Australian Government controlled entities:
Australian Customs and Border Protection Service;
Australian Postal Corporation;
Australian Rail Track Corporation Limited;
Australian Submarine Corporation Pty Limited;
Commonwealth Scientific and Industrial Research Organisation;
Defence Housing Australia;
Department of Defence;
Department of Finance;
Department of Foreign Affairs and Trade;
Department of Immigration and Border Protection;
Department of Infrastructure and Regional Development;
Department of Veteran Affairs;
Indigenous Land Corporation;
National Archives of Australia;
National Gallery of Australia;
National Library of Australia; and
Sydney Harbour Federation Trust.
Australian Government leased assets
Australian Government entities lease assets under a number of finance leases. As at

30 June 2015, the carrying value of leased assets included $1,400 million in land and
buildings (2014: $1,499 million) and $252 million in plant and equipment
(2014: $237 million). These entities were within the GGS. Refer Note 8D for accounting
policy disclosure on finance leases.
102
Reconciliation of movement in land and buildings, plant, equipment and infrastructure, heritage and cultural assets and intangibles
Australian Government Heritage

Net book value at 1 July 2013 9,440 25,742 40,288 21,087 10,547 368 4,657 3,165 115,294
Additions:
Purchases and entity acquisitions 28 2,620 4,309 3,656 77 2 708 243 11,643
Acquisition by finance lease 2 513 - 2,147 - - - - 2,662
Internally developed - - - - - - 630 1 631
Revaluations: write-ups 480 229 - 186 239 16 - - 1,150
Depreciation/amortisation expense - (1,583) (2,539) (2,122) (51) - (1,087) (116) (7,498)
Recoverable amount write-downs (2) (123) (469) (63) (6) - (57) (65) (785)
Reversal of write-downs - - 16 2 - - - 84 102
103
Other movements 483 (386) (337) 2,169 21 5 234 149 2,338

Disposals (35) (9) (25) (72) (2) (16) (8) (2) (169)
As at 30 June 2014 10,396 27,003 41,243 26,990 10,825 375 5,077 3,459 125,368
Additions:
Acquisition by finance lease 4 20 - 457 - - - - 481
Internally developed - - - - - - 783 - 783

Depreciation/amortisation expense (1) (1,623) (2,872) (2,368) (73) - (1,169) (114) (8,220)
Recoverable amount write-downs (2) (83) (907) (152) (3) - (150) (117) (1,414)
Reversal of write-downs 4 8 - 3 - - 5 213 233
Other movements - (134) 128 161 24 1 (121) (131) (72)
Disposals (118) (56) (5) (50) (1) (16) (17) - (263)
As at 30 June 2015 10,953 27,878 42,652 30,515 11,332 387 5,079 3,599 132,395
Australian Government assets under construction

Australian Government assets under construction include $2,885 million (2014: $3,238 million) in buildings, $11,993 million (2014:
$11,904 million) in specialist military equipment and $5,007 million (2014: $3,993 million) in other plant, equipment and infrastructure.
General Government
Reconciliation of movement in land and buildings, plant, equipment and infrastructure, heritage and cultural assets and intangibles
General Government Heritage
Gross book value 89 2,346 77,387 1,289 5 - 7,937 3,340 92,393
Accumulated depreciation - - (36,144) - - - (4,218) (876) (41,238)
At Cost: 89 2,346 41,243 1,289 5 - 3,719 2,464 51,155
Gross book value 9,242 25,629 - 15,022 10,876 183 - - 60,952

104

At Fair Value: 9,242 22,501 - 11,808 10,820 183 - - 54,554
Gross book value 1 2,609 81,186 1,484 1 - 8,644 3,533 97,458

Accumulated depreciation - - (38,534) - - - (4,955) (678) (44,167)
At Cost: 1 2,609 42,652 1,484 1 - 3,689 2,855 53,291
Gross book value 9,940 25,755 - 15,294 11,445 187 - - 62,621

At Fair Value: 9,940 23,030 - 12,140 11,331 187 - - 56,628
General Government assets at fair value Revaluation period
Assets held at fair value as at 30 June 2015 were based on valuations conducted in the following periods:
2013-14 or earlier 283 1,386 - 2,948 1 - - - 4,618
2014-15 9,657 21,644 - 9,192 11,330 187 52,010
Assets at fair value at 30 June 2015 9,940 23,030 - 12,140 11,331 187 - - 56,628
105

General Government Heritage

Net book value at 1 July 2013 8,917 23,500 40,288 12,610 10,547 195 3,579 2,057 101,693
Additions:
Internally developed - - - - - - 630 1 631
Depreciation/amortisation expense - (1,474) (2,540) (1,433) (51) - (848) (56) (6,402)
Recoverable amount write-downs - (116) (469) (40) (6) - (56) (37) (724)
Reversal of write-downs - - 16 - - - - 84 100
Other movements (57) 94 (336) 183 21 - 159 204 268
Disposals (31) (39) (25) (53) (2) (16) (5) (2) (173)
As at 30 June 2014 9,331 24,847 41,243 13,097 10,825 183 3,719 2,464 105,709
Additions (a):
106
Internally developed - - - - - - 652 - 652
Depreciation/amortisation expense (1) (1,509) (2,872) (1,480) (73) - (876) (51) (6,862)
Recoverable amount write-downs (2) (79) (907) (89) (3) - (68) (56) (1,204)
Reversal of write-downs - (6) - (1) - - 5 213 211
Other movements 10 (187) 128 368 23 2 (19) 9 334
Disposals (113) (42) (5) (48) (1) (16) (16) - (241)
As at 30 June 2015 9,941 25,639 42,652 13,624 11,332 187 3,689 2,855 109,919
General Government assets under construction
GGS assets under construction include $2,609 million (2014: $2,346 million) in buildings, $11,993 million (2014: $11,904 million) in
specialist military equipment and $1,497 million (2014: $1,289 million) in other plant, equipment and infrastructure.
Land, buildings, plant, equipment and infrastructure

Property, plant and equipment are stated at historical cost or valuation, except as
otherwise indicated. Property, plant and equipment are stated at fair value, except
assets under construction and specialist military equipment (refer Note 1.8), which is
valued at cost. Certain small entities and public corporations may adopt a cost basis in
their own financial statements. Where the difference is material to the CFS, an
adjustment is made on consolidation.
Where available, the fair value of property, plant and equipment is determined by
reference to market-based evidence, for example, the market value of similar
properties. If there is no market-based evidence of fair value because of the specialised
nature of the item of property, plant or equipment and the item is rarely sold, fair
value is estimated using an income (net present value/discounted cash flows) or a
depreciated replacement cost approach. The valuation techniques used for each class
of depreciable assets are disclosed in Note 6.
The cost of restoration or removal is provided for in the measurement of property,

plant and equipment when a legal or constructive obligation exists. These costs include
obligations relating to the dismantling, removal, remediation, restoration and other
expenditure associated with the Australian Governments fixed assets or site fit-outs.
Restoration provisions are initially recorded when a reliable estimate of the costs to be
incurred can be determined and are discounted to present value. Estimates are based
upon a review of lease contracts, legal requirements, historical information, and
expected future costs. Any changes to these estimates are adjusted on a progressive
basis as required.
Intangibles
The Australian Governments intangibles comprise internally developed software for
internal use, water entitlements and intangible assets acquired by public corporations
(PNFCs and PFCs). When public corporations acquire investments in controlled,
jointly controlled or associated entities, and pay an amount greater than the fair value
of the net identifiable assets of the entity, this excess is recognised as goodwill.
Intangibles are carried at cost. Water entitlements are classified as indefinite life
intangibles and are therefore subject to annual impairment testing. Goodwill and other
indefinite life intangibles are not amortised but tested for impairment on an
annual basis.
107
Note 7E: Inventories

2015 2014 2015 2014
$m $m $m $m
Inventories held for sale
Finished goods(a) 1,081 669 1,146 734
Raw materials and stores 57 63 70 77
Work in progress 242 535 247 539
Total inventories held for sale 1,380 1,267 1,463 1,350
Consumable stores and inventories
held for distribution 7,035 6,986 7,068 7,021
Total inventories 8,415 8,253 8,531 8,371
(a) Finished goods include $193 million valued at net realisable value (2014: $231 million).
Inventories
Inventories held for sale are valued at the lower of cost and net realisable value.
Inventories held for distribution are measured at cost, adjusted for any loss of service
potential. Quantities on hand and items of inventory are periodically evaluated with
excess and obsolete inventory recorded as a reduction to inventory and an expense.
Note 7F: Other non-financial assets

2015 2014 2015 2014
$m $m $m $m
Total biological assets 44 36 44 36
Total assets held for sale 129 95 129 143
Prepayments 4,516 2,985 4,620 3,058
Other 207 194 269 286
Total other non-financial assets 4,896 3,310 5,062 3,523
Note 7G: Assets by function(a)

2015 2014 (c) 2015 2014 (c)
$m $m $m $m
General public services 184,383 166,115 184,086 165,773
Defence 79,883 75,996 80,269 76,314
Public order and safety 2,915 2,579 2,944 2,595
Education 33,240 28,872 33,240 28,872
Health 1,261 5,495 1,244 3,596
Social security and welfare 8,317 7,547 7,979 7,189
Housing and community amenities 8,435 8,153 8,389 8,139
Recreation and culture 12,428 13,416 12,428 13,416
Fuel and energy 1,538 877 1,538 877
Agriculture, forestry and fishing 910 451 908 451
Mining, manufacturing and construction 525 296 2,384 1,856
Transport and communication 15,613 12,601 23,787 19,877
Other economic affairs 31,736 24,576 155,792 140,530
Other purposes(b) 48,067 43,234 17,349 19,545
Total assets 429,251 390,208 532,337 489,030
(a) Refer to Note 4F for a description of each function.
(b) Cash and deposits that are not allocated to other functions are included in the Other purposes function.
(c) The 2013-14 comparatives have been updated for consistency with the 2014-15 functional classification.
108
Note 8: Liabilities
Liabilities are obligations to another entity to provide economic value as a result of
past transactions and activities undertaken by Australian Government entities. They
include interest bearing liabilities, provisions and payables. The total Australian
Government liabilities and relative composition of liabilities are as follows:
$m
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
2013-14 2014-15
Deposits held (refer Note 8A) predominantly the liability for cash and deposits
held with the RBA and other PFCs;
Government securities (refer Note 8B) issued by the Australian Government in
the form of Treasury Bonds, Treasury Indexed Bonds and Treasury Notes;
Loans (refer Note 8C) comprising promissory notes issued to the IMF and other
multi-lateral organisations to meet Australias international financial obligations,
bonds issued by public corporations, and other loans;
Other borrowings (refer Note 8D) covers obligations under finance lease
arrangements;
Other interest bearing liabilities (refer Note 8E) includes Australias liability to
the IMF as denominated in special drawing rights (SDR), repurchase agreements
entered into by the RBA, and other debt not elsewhere classified;
Employee benefits (refer Note 8F) captures amounts owing to current and former
employees, the largest of which is the Australian Government obligation for the
unfunded proportion of the public sector and military superannuation schemes;
and
Other provisions and payables (refer Note 8G) including year-end obligations for
goods and services, current and capital transfers and unearned income. Also
includes a liability for currency notes issued by the RBA.
109
Note 8A: Deposit liabilities

2015 2014 2015 2014
$m $m $m $m
Exchange settlement funds - - 23,360 22,379
Drawing accounts held with the Reserve Bank
of Australia - - 370 824
State governments - - 59 -
Monies held in trust 212 206 212 206
Foreign governments - - 758 872
Other 6 5 365 307
Total deposit liabilities 218 211 25,124 24,588
Deposits held
Deposits include deposits at call and term deposits and are classified as financial
liabilities. Deposit balances are shown at their amortised cost, which is equivalent to
their face value. Interest is accrued over the term of deposits and is paid periodically or
at maturity.
Note 8B: Government securities

2015 2014 2015 2014
$m $m $m $m
Treasury bonds 359,868 309,202 359,868 309,202
Treasury notes 5,978 4,974 5,978 4,974
Treasury indexed bonds 38,176 32,419 38,176 32,419
Other 5,915 4,687 22 21
Total government securities 409,937 351,282 404,044 346,616
Government securities
Government securities liabilities are measured at fair value. Where a security is issued
at a premium or discount, the premium or discount is recognised at that time and
included in the book value of the liability.
Note 8C: Loans

2015 2014 2015 2014
$m $m $m $m
Bills of exchange and promissory notes 4,825 3,904 5,658 4,477
Bonds (non-Treasury) - - 2,908 3,067
Loans 868 804 1,141 920
Total loans 5,693 4,708 9,707 8,464
Loans maturity schedule
Not later than one year 212 104 801 594
Later than one year 5,481 4,604 8,906 7,870
Total loans by maturity 5,693 4,708 9,707 8,464
110
Loans
Loans are initially recognised at fair value plus any transaction costs that are directly
attributable to the issue, and are subsequently measured at either amortised cost or at
fair value through profit and loss. Any differences between the final amounts paid to
discharge the loan and the initial loan proceeds (including transaction costs) are
recognised in the operating statement over the borrowing period using the effective
interest method.
Note 8D: Other borrowings

2015 2014 2015 2014
$m $m $m $m
Finance lease liabilities as at the reporting date
are reconciled to the lease liability as follows:
Not later than one year 143 175 588 569
Later than one year and not later than five years 650 651 1,965 1,836
Later than five years 2,277 2,301 11,072 10,495
Minimum lease payments 3,070 3,127 13,625 12,900
less future finance charges 1,561 1,598 8,289 7,910
Total finance lease liabilities 1,509 1,529 5,336 4,990
Finance lease liabilities maturity schedule
Current 45 80 192 199
Non-current 1,464 1,449 5,144 4,791
Total finance lease liabilities by maturity 1,509 1,529 5,336 4,990
Other borrowings (finance leases)

Finance leases effectively transfer from the lessor to the lessee substantially all the risks
and rewards incidental to ownership of leased assets. Where an asset is acquired by
means of a finance lease, the asset is capitalised at either the fair value of the leased
asset or, if lower, the present value of minimum lease payments at the inception of the
lease contract. A corresponding liability is recognised at the same time in other
borrowings. Lease payments are allocated between the principal component and the
interest expense. The discount rate used is the interest rate implicit in the lease.
Note 8E: Other interest bearing liabilities

2015 2014 2015 2014
$m $m $m $m
Swap principal payable 942 469 2,174 783
Amounts outstanding under repurchase agreements - - 1,780 5,244
Special reserve - IMF special drawing rights 5,633 5,054 5,633 5,054
Finance lease incentives 131 144 139 154
Other 9 7 1,565 1,699
Total other interest bearing liabilities 6,715 5,674 11,291 12,934
111
Other interest bearing liabilities
The IMF SDR allocation liability reflects the current value in Australian dollars of the
Australian Governments liability to repay Australias cumulative allocations of SDRs.
Interest is payable to the IMF in relation to the amount by which Australias SDR
holdings are below Australias net cumulative allocations. Interest expense is
recognised as it accrues.
In the course of financial market operations, the RBA engages in repurchase

agreements involving foreign and Australian dollar marketable securities. Securities
sold but contracted for purchase under repurchase agreements are reported within the
relevant investment category and are valued at market prices. The counterparty
obligation to repurchase is reported as an interest bearing liability and is measured at
amortised cost. The difference between the sale and purchase price is recognised as
interest expense over the term of the agreement.
Note 8F: Employee benefits

2015 2014 2015 2014
$m $m $m $m
Total superannuation liability 248,209 221,747 248,540 221,948
Other employee liabilities
Leave and other entitlements 7,263 7,331 9,770 9,800
Accrued salaries and wages 785 772 875 854
Workers compensation claims 3,225 3,175 3,374 3,314
Separations and redundancies 154 284 388 383
Military compensation 5,333 4,092 5,333 4,092
Other 292 276 351 277
Total other employee liabilities 17,052 15,930 20,091 18,720
Total employee and superannuation liabilities 265,261 237,677 268,631 240,668
Employee numbers
As at 30 June 2015, the number of full time equivalent employees was 295,808
(2014: 304,491). This comprises civilians and military personnel, including reserve
forces.
Superannuation
The superannuation liability represents the present value of the

Australian Governments unfunded liability to employees for past services as
estimated by the actuaries of the respective superannuation plans. Additional
information on superannuation is included in Note 12C.
112
Other employee liabilities
Liabilities for short-term employee benefits (as defined in AASB 119 Employee Benefits)
and termination benefits due within 12 months of balance date are measured at their
nominal amounts. The nominal amount is calculated with regard to the rates expected
to be paid on settlement of the liability. The liability for leave and other entitlements
includes provision for annual leave and long service leave.
Liabilities for services rendered by employees are recognised at the reporting date to
the extent that they have not been settled. All other employee benefit liabilities are
measured at the present value of the estimated future cash outflows to be made in
respect of services provided by employees up to the reporting date.
The liability for long service leave is calculated using expected future increases in
wages and salary rates including related on-costs and is discounted using applicable
government bond rates. In determining the present value of the liability, attrition rates,
pay increases through promotion and inflation are taken into account. The liability for
long service leave has been determined by reference to the work of actuaries.
Workers compensation claims
The provision represents an estimate of the present value of future payments in respect
of claims for events occurring before 30 June 2015 with a 75 per cent probability of
sufficiency. The expected future payments are discounted to present value using a risk
free rate. The expected future payments include claims reported but not yet paid,
claims incurred but not yet reported, and anticipated claims handling costs.
Military compensation
The military compensation provision represents an estimate of the present value of

future payments in respect of claims under the Military Rehabilitation and Compensation
Act 2004 and the Safety, Rehabilitation and Compensation Act 1988 arising from service
rendered before 30 June 2015. The provision is calculated by discounting future
payments using a yield curve derived from the yields on Commonwealth bonds of
various durations as at 30 June 2015.
The military compensation provision is subject to inherent sources of uncertainty

arising from a range of factors, including that claims may not be received until many
years after the event and subsequent payments for income support, health and
rehabilitation services can extend over a long period of time. The Annual Report for
the Department of Veterans Affairs details the assumptions and areas of uncertainty
underpinning the actuarial estimation of the military provision.
113
Note 8G: Other provisions and payables

2015 2014 2015 2014
$m $m $m $m
Payables
Suppliers payable
Trade creditors 3,646 3,561 4,431 4,622
Operating lease rental payable 325 264 325 264
Other creditors 630 1,056 802 1,260
Total suppliers payable 4,601 4,881 5,558 6,146
Total personal benefits payable 5,983 5,607 5,983 5,607
Total subsidies payable 4,529 4,482 4,529 4,482
Grants payable
State and Territory governments 630 679 630 679
Private sector 573 384 573 384
Overseas 1,483 1,660 1,483 1,660
Local governments 3 2 3 2
Other 550 630 550 630
Total grants payable 3,239 3,355 3,239 3,355
Other payables
Unearned income 916 1,091 1,248 2,029
Accrued expenses 897 961 2,518 1,947
Other 875 1,081 900 1,113
Total other payables 2,688 3,133 4,666 5,089
Total payables 21,040 21,458 23,975 24,679
Australian currency on issue - - 65,481 60,778
Other provisions
Grant provisions 8,457 10,846 8,457 10,846
Provision for outstanding benefits
and claims 12,876 12,446 12,876 12,853
Provision for tax refunds 2,888 2,920 2,888 2,918
Provision for restoration,
decommissioning and makegood 2,159 2,017 2,259 2,122
Other 952 953 1,233 1,310
Total other provisions 27,332 29,182 27,713 30,049
Total provisions 27,332 29,182 93,194 90,827
Total other provisions and payables 48,372 50,640 117,169 115,506
114
A: Reconciliation of movement in provisions

2015 2014 2015 2014
$m $m $m $m
Movement table:
Balance of provisions at 1 July 29,182 32,222 90,827 90,025
Provisions made during the year 8,458 19,704 13,166 28,064
Provisions used during the year (9,188) (14,569) (9,764) (19,131)
Provisions remeasured, reversed or
unwound during the year (1,120) (8,175) (1,035) (8,131)
Balance of provisions at 30 June 27,332 29,182 93,194 90,827
Other provisions and payables

Payables
Trade and other payables, including accruals, are recorded when

Australian Government entities are required to make future payments as a result of a
purchase of assets or services. Payables are initially recognised at fair value and are
subsequently measured at amortised cost.
Provisions
Non-employee provisions are recognised at the best estimate of the expenditure

required to settle the present obligation at the reporting date. If the effect is material,
provisions are determined by discounting the expected future cash flows (adjusted for
expected future risks) required to settle the obligation at a rate that reflects current
market assessments of the time value of money and the risks specific to the liability.
The calculation of provisions is subject to the volatility of economic assumptions used,

in particular, the discount rate and the effects of inflation as well as the impact of
variations in payment patterns. In calculating the estimated cost of future payments for
each provision, actuarial advice is generally obtained. Given the uniqueness of a
number of the Australian Government provisions and the use of actuarial
assumptions, there can be an element of uncertainty in the estimate.
Australian currency on issue
Australian currency issued represents a liability of the RBA in favour of the holder.
Currency issued for circulation, including demonetised currency, is measured at face
value. When the RBA issues currency notes to the commercial banks it receives, in
exchange, funds equal to the full face value of the notes issued.
115
Note 9: Net revaluation increases/(decreases)

2015 2014 2015 2014
$m $m $m $m
Financial assets
Equity investments 3,201 7,679 383 282
Land 679 496 638 498
Buildings 272 139 329 230
Other infrastructure, plant and equipment 169 260 107 244
Provision for restoration, decommissioning and
makegood 9 24 9 24
Total non-financial assets 1,647 1,158 1,601 1,235
Total revaluation increases/(decreases) 4,848 8,837 1,984 1,517
116
Note 10: Reconciliation of cash

Cash and deposits
Cash includes: cash at bank and on hand, short term deposits at call and investments
in short-term money market instruments that are used in the cash management
function on a day-to-day basis, net of outstanding bank overdrafts. Cash and
cash equivalents includes notes and coins held and any deposits in bank accounts with
an original maturity of three months or less that are readily convertible to known
amounts of cash and subject to insignificant risk of changes in value. Deposits at call,
which are held for longer-term investment purposes, are classified as investments.
Cash is recognised at its nominal amount.
A: Reconciliation of net operating balance to net cash flows from operating

activities
2015 2014 2015 2014
$m $m $m $m
Net operating balance (37,415) (40,587) (40,821) (34,259)
less Revenues not providing cash
Other 745 554 579 384
Total revenues not providing cash 745 554 579 384
plus Expenses not requiring cash
Increase in employee entitlements 8,382 16,301 8,636 16,500
Depreciation/amortisation expense 6,804 6,340 8,099 7,422
Mutually agreed writedowns 1,857 2,627 1,857 2,477
Other non-cash expenses 1,881 (6,867) 1,882 (6,863)
Total expenses not requiring cash 18,924 18,401 20,474 19,536
plus Cash provided by working capital items
(Increase)/Decrease in receivables (6,067) (8,858) (3,668) (7,469)
(Increase)/Decrease in inventories (489) (474) (498) (491)
(Increase)/Decrease in other financial assets 1,280 99 1,200 154
(Increase)/Decrease in other non-financial
assets (1,479) (319) (1,472) (363)
Increase/(Decrease) in benefits, subsidies
and grants payable (189) (2,410) (189) (2,410)
Increase/(Decrease) in supplier payables 2,417 (506) 2,098 (447)
Increase/(Decrease) in other
provisions and payables (967) (1,760) (1,412) (1,347)
Total cash provided/(used) by working
capital items (5,494) (14,228) (3,941) (12,373)
equals Net cash from/(used by) operating
activities (24,730) (36,968) (24,867) (27,480)
B: Reconciliation of cash at the end of the reporting period as shown in

the cash flow statement to the related items in the balance sheet.
Cash at the end of the reporting period as shown in the Australian Government and
GGS cash flow statement is equal to cash and deposits as reported in the Australian
Government and GGS balance sheet.
117
Note 11: Commitments
as at 30 June 2015
General Public non-financial Public financial Australian
government corporations corporations Government
2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m
Capital commitments
Land and buildings 1,948 1,480 34 96 - - 1,979 1,568
Infrastructure, plant and equipment 853 1,218 7,652 1,676 82 37 8,570 2,923
Specialist military equipment 9,848 10,252 - - - - 9,848 10,252
Investments 33,362 33,747 - - - - 17,047 12,665
Other capital commitments 1,309 986 1 - 12 2 1,322 988
Total capital commitments 47,320 47,683 7,687 1,772 94 39 38,766 28,396
Other commitments
Operating leases 17,285 17,489 1,711 1,658 1 342 18,908 19,398
Grant commitments 109,189 101,500 - - - - 109,189 101,500
Other commitments 50,621 39,082 2,423 4,384 68 1 52,698 43,165
118
Total other commitments 177,095 158,071 4,134 6,042 69 343 180,795 164,063
Total commitments 224,415 205,754 11,821 7,814 163 382 219,561 192,459
less Commitments receivable 1,834 4,527 16,898 21,682 14 10 2,091 4,774
Net commitments by type 222,581 201,227 (5,077) (13,868) 149 372 217,470 187,685
Capital - One year or less 30,338 22,340 1,689 1,539 60 38 24,246 18,716
Capital - From one to five years 16,581 23,164 2,410 233 33 2 10,548 7,517
Capital - Over five years 393 1,036 3,587 - - - 3,980 1,036
47,312 46,540 7,686 1,772 93 40 38,774 27,269
Operating leases - One year or less 2,323 2,268 286 241 (2) 45 2,607 2,554
Operating leases - From one to five years 6,904 6,630 714 700 (10) 155 7,609 7,485
Operating leases - Over five years 5,980 6,561 705 707 (2) 137 6,683 7,405
15,207 15,459 1,705 1,648 (14) 337 16,899 17,444
Other - One year or less 52,511 48,207 (7,001) (3,902) 1 (2) 53,328 49,464
Other - From one to five years 97,351 81,252 (7,412) (14,333) 69 (3) 98,371 83,884
Other - Over five years 10,200 9,769 (55) 947 - - 10,098 9,624
160,062 139,228 (14,468) (17,288) 70 (5) 161,797 142,972
Net commitments by maturity 222,581 201,227 (5,077) (13,868) 149 372 217,470 187,685
Commitments are obligations or undertakings to make future payments to other entities that exist at the end of the reporting period
but which have not been recognised as liabilities in the balance sheet. The above does not include commitments for grants payable to
the states and territories under the Federal Financial Relations Act 2009 (for the current and comparative years). The budgeted
information for payment of grants to states and territories can be found in Budget Paper No. 3.
Operating leases comprise the following:

Nature of lease General description of leasing arrangement
Leases for computer Most entities lease computer equipment and software.
equipment Computer leases are generally for three to five years with an option to renew for one to two further periods of two to three years each. In
some cases there are no renewal or purchase options available to the agencies.
Leases are effectively non-cancellable. No contingent rentals exist.
Leases for office Entities may lease office accommodation from parties outside the Australian Government.
accommodation Leases for office accommodation generally range from one to 15 years (although they can be longer). They may be extended for up to
three to five years from the originally specified expiry date. In some cases there are no renewal or purchase options available to the entities.
Leases are effectively non-cancellable.
119
In most cases lease payments are subject to increases in accordance with terms as negotiated under the lease (generally subject to annual
increase in accordance with upwards movements in the consumer price index, a set annual increase agreed to in the lease or an
annual/bi-annual review).
Agreements for the Most entities lease motor vehicles as part of the senior executive officers remuneration packages and also for general office use.
provision of motor Vehicle leases are generally for a minimum period of three months and typically extend from two to four years. They may be extended for up
vehicles to three months from the originally specified expiry date. In some cases there are no renewal or purchase options available to the agencies.

Leases are effectively non-cancellable. No contingent rentals exist. Lease payments are fixed for the term of the lease.
Leases for office Most entities lease office equipment.
equipment Office equipment leases are generally for three to five years. In some cases there are no renewal or purchase options available to the
agencies. Leases are effectively non-cancellable. No contingent rentals exist.
In some cases there are additional costs based on usage of the equipment.
Leases for Lease payments are subject to increases in accordance with terms as negotiated under the lease.
transportation and The transportation leases generally have options for renewal. Future options not yet exercised are not included as commitments.
support facilities for
Antarctic operations Leases are effectively non-cancellable and no contingent rentals exist.
Note 12: Risks

The assets and liabilities in the 2014-15 CFS incorporate assumptions and judgements
based on the best information available at the date of signing. The judgements and
estimates made by Australian Government entities that have the most significant
impact on the amounts recorded in the financial statements are disclosed in Note 1.
In addition to these, there are a range of factors that may influence the amounts
ultimately realised or settled in future years that relate to past events. The disclosure of
these factors increases the transparency of the risks to the Governments financial
position. These risks have been grouped into the following disclosures:
Contingencies (refer Note 12A) comprising possible obligations or assets arising

from past events and whose existence will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events. The Australian Government
has issued a number of guarantees, such as those relating to guarantee schemes for
the banking and financial sector, while other significant contingent liabilities relate
to uncalled capital subscriptions and credit facilities to international financial
institutions and legal cases concerning the Australian Government.
The Government has robust and conservative strategies in place to reduce its
potential exposure to these contingent liabilities.
Financial Instrument disclosures (refer Note 12B) concerning the contractual

arrangements that the Australian Government has entered into for policy, liquidity
or financing purposes. To varying degrees, Australian Government entities are
exposed to the following risks arising from financial instruments:
Market risk
Credit risk; and
Liquidity risk.
Defined benefit superannuation plans (refer Note 12C) comprise the

Governments largest liability after public debt. Under these schemes, the
Australian Governments obligation is to provide the agreed benefits to current and
former employees, for which it bears actuarial risk (the risk that benefits will cost
more than expected). Given the significance of these obligations, Note 12C explains
the characteristics of the major defined benefit plans and risks associated with
them, and describes how the plans may affect the amount, timing and uncertainty
of the Australian Governments future cash flows. The Future Fund is a long-term
investment fund that is designed to enhance the ability of the
Australian Government to discharge unfunded superannuation liabilities expected
after 2020, when an ageing population is likely to place significant pressures on the
Governments finances.
Consistent with the amounts recognised in the financial statements, the disclosures are
based on the policies, events and arrangements up to the reporting date and do not
include policy decisions announced in the 2015-16 Budget Papers which have not yet
been enacted or implemented.
120
Note 12A: Contingencies
Reconciliation of movement in quantifiable contingent liabilities and contingent assets
Contingent Liabilities
Uncalled shares Claims for Other Total Total Net
Guarantees Indemnities or capital damages or quantifiable quantifiable Contingent Contingent
Item (a)(e) (b) subscriptions(c) costs contingencies liabilities assets Liabilities
$m $m $m $m $m $m $m $m
Opening balance as at 1 July 2013 16,714 447 13,251 228 7,263 37,903 332 37,571
Increases 35 1 - 94 1,232 1,362 141 1,221
Re-measurement (77) (89) 223 7 (1,161) (1,097) (20) (1,077)
Liabilities/Assets crystallised - - - (43) (1) (44) (248) 204
Expired (33) (27) - (105) (1,891) (2,056) (15) (2,041)
As at 30 June 2014 16,639 332 13,474 181 5,442 36,068 190 35,878
121
Opening balance as at 1 July 2014 16,639 332 13,474 181 5,442 36,068 190 35,878
Increases (d) 39 3 - 81 256,453 256,576 10 256,566
Re-measurement 1,362 (2) 2,095 (53) 829 4,231 28 4,203
Liabilities/Assets crystallised - - - (38) (1) (39) (51) 12
Expired (26) (18) - (20) (2,798) (2,862) (49) (2,813)

As at 30 June 2015 18,014 315 15,569 151 259,925 293,974 128 293,846
(a) A guarantee is where one party promises to be responsible for the debt or performance obligations of another party should that party default in some way.
(b) An indemnity is a legally binding promise whereby a party undertakes to accept the risk of loss or damage another party may suffer.
(c) Uncalled shares/capital subscriptions include uncalled shares of $15,504 million (2014: $13,415 million) in the European Bank for Reconstruction and Development,
the International Bank for Reconstruction and Development, the Multilateral Investment Guarantee Agency and the Asian Development Bank.
(d) From 1 January 2015, the RBA has provided a Committed Liquidity Facility (CLF) to eligible authorised deposit-taking institutions (ADIs) as part of Australias
implementation of the Basel III liquidity requirements. The CLF provides ADIs with a contractual commitment to funding under repurchase agreements with the RBA,
subject to certain conditions.
(e) The comparatives have been updated to align with current year classifications and for prior period adjustments. This includes Export Finance and Insurance
Corporation guarantees which were previously recognised as remote contingencies. The reclassification more appropriately reflects the nature of the contingency.
Contingent liabilities and assets are not recognised in the balance sheet but are
disclosed in the relevant notes. They are classified as contingent due to:
uncertainty as to the existence of a liability or asset which will only be confirmed by

the occurrence or non-occurrence of one or more future events not wholly within
the control of the Australian Government,
an existing liability in respect of which settlement is not probable or, for a

contingent asset, where the inflow of economic benefits is not virtually certain, or
an existing liability or asset where the amount cannot be reliably measured.
Quantifiable contingencies by sector(a)(b)

as at 30 June 2015
General Public non-financial Public financial
Government corporations corporations
2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m
Quantifiable contingent liabilities
Guarantees 16,506 14,827 389 389 1,180 1,423
Indemnities 415 332 - - - -
Uncalled shares/capital subscriptions 15,504 13,415 - - 66 59
Claims for damages/costs 113 174 39 7 - -
Other contingencies 4,901 5,441 - 1 255,024 -
Total quantifiable contingent liabilities 37,439 34,189 428 397 256,270 1,482
less Quantifiable contingent assets 117 145 12 15 - 30
Net quantifiable contingencies 37,322 34,044 416 382 256,270 1,452
(a) Refer to the Australian Government contingency disclosures for further details on quantifiable and
non-quantifiable contingencies.
(b) Transactions between sectors are included in this table but eliminated in the consolidated statements to
avoid double counting. Accordingly, the sum of the amounts for each line item may exceed or be less
than the equivalent amount in the consolidated statements.
Non-quantifiable contingencies
The following pages list unquantifiable contingencies. Those identified and reported in
the 2014-15 CFS for the first time have been identified as new. 1
Further detail on individual contingencies may be included in the annual report for the
respective Commonwealth entity.
1 A number of the new contingent liabilities have previously been reported in the Statement of
Risks included in the Australian Government budget documentation.
122
Guarantees, indemnities and undertakings

A range of guarantees, indemnities and undertakings have been provided by
Australian Government entities in relation to various agreements, deeds and other
matters and some of these guarantees, indemnities and undertakings are unlimited.
Guarantees, indemnities and undertakings include, but are not limited to:
Emergency pest and disease response arrangements (administered by the

Department of Agriculture). The Australian Government is typically liable for
50 per cent of total government funding to respond to a disease or pest outbreak.
The Australian Government may be expected to contribute bilaterally in situations
where an incursion is not covered by a cost sharing agreement or where the
relevant industry body is not party to an agreement. The Australian Government
may also provide financial assistance to an industry party by funding its initial
share of the response. These contributions may subsequently be recovered from the
industry over a period of up to ten years, usually by a levy;
Native title agreements access to geospatial data (administered by the

Attorney-Generals Department) whereby indemnities have been provided against
third-party claims arising from errors in the data. Under the Native Title Act 1993,
the Australian Government will be liable for any compensation found to be payable
in respect of compensable acts for which the Commonwealth is responsible;
Australian Victims of Terrorism Overseas Payment (administered by the

Attorney-Generals Department). The Australian Government manages a scheme
for providing financial assistance to Australians who are victims of an overseas
terrorist act that has been declared by the Prime Minister. Under the scheme,
Australians harmed (primary victims) and Australians who are close family
members of a person who dies as a direct result of a declared terrorist act
(secondary victims) will be able to claim payments of up to $75,000. As acts of
terrorism are unpredictable, the cost of the scheme is unquantifiable.
Additionally the Terrorism Insurance Scheme is managed by the Australian

Reinsurance Pool Corporation (ARPC) for replacement terrorism insurance
covering damage to commercial property including associated business
interruption and public liability under the Terrorism Insurance Act 2003. The
Australian Government guarantees to pay any liabilities of the ARPC, but the
Treasurer must declare a reduced payout rate to insured parties if the Australian
Governments liability would otherwise exceed $10 billion. A declared terrorist
incident was announced by the Treasurer on 15 January 2015 relating to the
incident at the Lindt Caf in Martin Place on 15 and 16 December 2014. Claims have
been submitted by affected reinsurers, however, the quantum of claims have not
exceeded their individual retentions;
123
Australian Red Cross Society blood and blood products (administered by the
Department of Health). The Australian Government, states and territories jointly
provide indemnity for the Australian Red Cross Blood Service regarding personal
injury and loss or damages suffered by a recipient of certain blood and blood
products where other available mitigation or cover is not available;
CSL Ltd (administered by the Department of Health). The Australian Government

has indemnified CSL Ltd for a specific range of events that occurred during the
Plasma Fractionation Agreement from 1 January 1994 to 31 December 2004, where
alternative cover was not arranged by CSL Ltd. Indemnities relate to certain
existing and potential claims made for personal injury, loss or damage suffered
through therapeutic and diagnostic use of certain products manufactured by
CSL Ltd;
Vaccines (administered by the Department of Health). Indemnities have been

provided to the manufacturers of smallpox and influenza vaccines held by the
Australian Government, covering possible adverse events that could result from the
use of the vaccines in an emergency situation;
The Australian Medical Association Ltd (AMA) (administered by the Department

of Health). The AMA, the Commonwealth, Australian Private Hospitals
Association Ltd, Australian Health Insurance Association and Beyond Blue Ltd
have agreed to indemnify each other in respect of any loss, liability, cost, claim or
expense due to misuse of confidential information or breach of the Privacy Act 1988
in relation to participation in and support of the Private Mental Health Alliance;
New South Wales Health Administration Council (NSW HAC) (administered by

the National Health Funding Body (NHFB)). An indemnity has been provided to
the New South Wales Government through the NSW HAC, in relation to a state
funding pool account with the RBA. The indemnity includes liabilities or claims
arising from acts or omissions of NHFB staff as users of pool account information,
liabilities or claims arising from unauthorised access to the banking services or
system from NHFB premises. NSW HAC has provided a reciprocal indemnity for
the actions of staff of the NHFB to the RBA;
Medical Indemnity (administered by the Department of Health). The Incurred But

Not Reported Scheme is designed to fund the incurred but not reported liabilities of
Medical Defence Organisations where they do not have adequate reserves to cover
their liabilities. Eligibility for claim payments under this scheme is dependent on
whether the Medical Indemnity Insurer is deemed to be a participating Medical
Defence Organisation under the Medical Indemnity Act 2002 and the Midwife
Professional Indemnity (Commonwealth Contribution) Scheme Act 2010;
Medical Indemnity Exceptional Claims Scheme (MIECS) (administered by the

Department of Health). The MIECS assumes liability for 100 per cent of any
damages payable against a doctor that exceeds a specified level of cover provided
by that doctors medical indemnity insurer (currently $20 million);
124
Asian Football Confederation Cup (new) (administered by the Department of

Health). The Australian Government has agreed to pay a percentage of any amount
payable by a state beyond an agreed threshold for hosting the Asian Football
Confederation Cup 2015, given by that state under or in connection with the
Competition Agreement;
Northern Maritime Patrol and Response Triton (administered by the

Department of Immigration and Border Protection). The Government has entered
into a contractual arrangement with Gardline Australia Pty Ltd for the provision of
a vessel to strengthen enforcement activities in Australias northern waters.
The contract with Gardline Australia Pty Ltd contains unquantifiable indemnities
relating to the use, or other operations, of armaments and the presence of
armaments on the vessel. It also contains unquantifiable indemnities relating to
damage to any property or injury to any person caused by apprehended or escorted
persons or their vessel;
Immigration detention services Serco (new) (administered by the Department

of Immigration and Border Protection). On 11 December 2014, the
Australian Government entered into a contract with Serco Australia Pty Ltd (Serco)
to deliver immigration detention services in Australia on behalf of the Australian
Government at immigration detention facilities. The contract terms limit Sercos
liability to the Australian Government to a maximum of any insurance proceeds
recovered by Serco up to a value of $330 million. Sercos liability is unlimited for
specific events defined under the contract;
Immigration detention services state and territory governments (administered

by the Department of Immigration and Border Protection). The
Australian Government has negotiated arrangements with a number of state and
territory governments for the provision of health, education, corrections and
policing services to immigration detention facilities and people in immigration
detention. Some jurisdictions are seeking indemnification by the Australian
Government for the provision of those services;
Snowy Hydro Limited water releases (administered by the Department of

Industry and Science). The Australian, New South Wales and
Victorian governments have indemnified Snowy Hydro Limited for liabilities
arising from water releases in the Snowy River below Jindabyne Dam, where these
releases are in accordance with the water licence and related regulatory
arrangements agreed between the three governments. The indemnity applies to
liabilities for which a claim is notified within 20 years from 28 June 2002;
Maralinga clean-up (administered by the Department of Industry and Science).

Fourteen unlimited indemnities have been given in relation to the clean-up of the
former British atomic test site at Maralinga;
125
Gorgon liquefied natural gas and carbon dioxide storage project (new)
(administered by the Department of Industry and Science). On 13 February 2015,
the Australian and Western Australian governments signed an agreement to
provide an indemnity to the Gorgon Joint Venture Partners (GJV) to indemnify the
GJV against independent third-party claims (relating to stored carbon dioxide)
following closure of the carbon dioxide sequestration project. The
Western Australian Government will indemnify the GJV, and the Australian
Government will indemnify the Western Australian Government for 80 per cent of
any amount determined to be payable;
Liquid Fuel Emergency Act 1984 (administered by the Department of Industry and
Science). The Australian Government and state and territory governments have
entered into an inter-governmental agreement in relation to a national liquid fuel
emergency. Under the agreement, the Australian Government may incur the direct
costs of managing a liquid fuel emergency and includes the possibility of the
Australian Government reimbursing the state and territory governments for costs
arising from their responses, and potential compensation for industry arising from
Australian Government directions under the Act;
Maritime incident clean-up (administered by the Department of Infrastructure and

Regional Development). The Australian Maritime Safety Authority is responsible
for the provision of funds necessary to meet the clean-up costs arising from
ship-sourced marine pollution and, in all circumstances, is responsible for making
appropriate efforts to recover the costs of any such incidents. The
Australian Government meets costs that cannot be recovered from such incidents;
Accommodation Payment Guarantee Scheme (administered by the Department of

Social Services). The Australian Government guarantees the repayment of aged care
residents accommodation bonds, entry contribution balances and, from 1 July 2014,
refundable accommodation deposits and contributions if the approved provider
becomes insolvent or bankrupt and defaults on its refund obligations. From the
latest available information, the maximum contingent liability, in the highly
unlikely event that all providers defaulted, is $15.6 billion. For the 2014-15 financial
year, the scheme was activated twice with total payments of $8.6 million. Since the
scheme was introduced it has been activated a total of eight times requiring
payment of $42.7 million;
National Disability Insurance Scheme (NDIS) (new) (administered by the

Department of Social Services). The Australian Government has committed to
provide temporary, untied financial assistance to some jurisdictions that expect to
have their GST entitlements adversely affected during the transition to the NDIS.
Any impact on the Australian Government is not expected to occur before 2016-17;
IMF New Arrangements to Borrow (NAB) (administered by the Department of the

Treasury). Australia has made a line of credit available to the IMF under its NAB
since 1998. During 2014-15, Australia met three calls under the NAB totalling
A$40.8 million (special drawing rights 23 million);
126
Loan to New South Wales for James Hardie Asbestos Injuries Compensation
Fund (administered by the Department of the Treasury). The
Australian Government has agreed to lend up to $160 million to the
New South Wales Government to support the loan facility to top up the
James Hardie Asbestos Injuries Compensation Fund. The loan agreement is subject
to a number of conditions; and
Officers and Directors assisting the Commonwealth in relation to asset sales,

reviews and other arrangements (administered by various entities). From time to
time, the Australian Government has provided warranties, undertakings and
indemnities (indemnities) to directors, committee members, advisers, officers
and/or staff of organisations for activities undertaken in good faith in assisting the
Commonwealth in relation to asset sales, reviews and other arrangements.
This includes indemnities in relation to the: Directors of NBN Co Ltd (NBN Co);
Export Finance Insurance Corporation board members and senior management;
former Directors of the Australian Submarine Corporation Pty Ltd; directors and
delegates of the board of the Commonwealth Superannuation Corporation,
Future Fund Board of Guardians (Board members); officers and employees of
ADI Limited; Maritime Industry Finance Company Ltd board members;
Moorebank Intermodal Company Limited board members; Directors of
National Rail Corporation; certain specified members of the review into the
Australian Human Pituitary Hormone Programme; and certain specified members
of the review into the Diagnostics Products Agreement. The
Australian Government has also indemnified the boards and/or acquirers of certain
entities against certain claims and costs arising from the sales of the Government
entities. The probability of these indemnities being called upon is generally
considered remote but is included for completeness.
Claims and proceedings

At any time various Australian Government entities are subject to claims and legal
actions that are pending court or other processes. These include, but are not limited to:
Suspension of livestock exports to Indonesia (administered by the Department of

Agriculture). Proceedings have commenced against the Australian Government for
losses due to the temporary suspension of exports of live animals to Indonesia that
was put in place on 7 June 2011. Currently the amount of the claims remains
unquantified;
Equine influenza outbreak (administered by the Department of Agriculture).

Proceedings have commenced against the Australian Government in relation to the
outbreak of equine influenza in 2007. The final quantum of damages sought cannot
be calculated;
127
Termination of the funding agreement with OPEL Network Pty Ltd

(administered by the Department of Communications). As at 30 June 2015, the
Australian Government is a party to legal action brought against it in relation to an
agreement under the Broadband Connect Infrastructure Programme. The outcome
of that litigation cannot be predicted;
Australian Government general insurance fund Comcover (administered by

the Department of Finance). Comcovers liability for outstanding claims, which
includes the expected future cost of claims notified and claims incurred but not
reported, is subject to inherent uncertainty in the estimation process. The
Australian Governments potential liability cannot be quantified at this time;
Tobacco Plain Packaging (administered by the Department of Health) The

Government will continue to fund the defence of legal challenges to the tobacco
plain packaging legislation in international forums;
Medicare Locals (administered by the Department of Health). Due to the

Governments commitment to cease all Commonwealth funding to Medicare Locals
from 30 June 2015, the Commonwealth is terminating the Medicare Locals Deed for
Funding and Program Schedules under clause 22.1(i). The Commonwealth is
therefore liable for any reasonable costs incurred by Medicare Locals which are
directly attributable to the termination. Some funds are also expected to be
recovered from a number of sites as a result of the termination, which would
partially offset the liability. Neither costs nor potential recoveries can be estimated
at present; and
Business Services Wage Assessment Tool (BSWAT) (administered by the

Department of Social Services). The Australian Government may potentially
become liable for a significant range of costs following the full Federal Court ruling
(21 December 2012) that the use of the BSWAT to assess the wages of
two intellectually disabled employees constituted unlawful discrimination under
the Disability Discrimination Act 1992. The Australian Governments potential
liability cannot be quantified at this time.
Property remediation Defence and other sites

From time to time, the Australian Government may have ownership of properties that
have a potential or possible environmental and associated concern. Where this is the
case, further reviews may be undertaken to determine the extent, nature and estimated
costs of remediation, if required. Specifically:
Defence has made financial provision for the estimated costs involved in restoring,
decontaminating and decommissioning property where a legal or constructive
obligation has arisen. For cases where there is a legal or constructive obligation, but
the potential cost could not be quantified, the obligations have been assessed as
unquantifiable contingencies; and
128
Under the Googong Dam lease agreement with the Australian Capital Territory
Government, the Australian Government is required to undertake rectification of
easements or any defects in title, and remediation of any contamination it may have
caused to the site. It also gives an indemnity in relation to acts or omissions by the
Australian Government.
Non-quantifiable contingent assets

Contingent assets include but are not limited to:
HIH Claims Support Scheme (HCSS) (administered by the Department of the

Treasury). As an insured creditor in the liquidation of the HIH Group, the
Australian Government is entitled to payments arising from the HCSSs position in
the Proof of Debt of respective HIH companies. The Australian Government has
received payments from the HIH Estate during 2014-15, however, the timing and
amount of future payments are unknown and will depend on the outcome of the
estimation process and the completion of the liquidation of the HIH Group;
International Monetary Fund (IMF) (administered by the Department of the

Treasury). Since 1986, the IMF has used its burden sharing mechanism to make up
for the loss of income from unpaid interest charges on the loans of debtor members
and to accumulate precautionary balances in a Special Contingent Account to
protect the IMF against losses arising from the failure of a member to repay its
overdue principal obligations. As there is considerable and inherent uncertainty
around the timing and amounts of burden sharing to be refunded to Australia this
contingent asset cannot be reliably measured and as such is recorded as an
unquantifiable contingent asset;
Wireless local area network. The Commonwealth Scientific and Industrial

Research Organisation (CSIRO) has ongoing patent infringement proceedings in the
United States of America in relation to CSIROs invention of a wireless local area
network. The final amount of the damages awarded is presently unknown; and
Coal Mining Industry (Long Service Leave) Legislation Amendment Act 2011. The
Coal Mining Industry (Long Service Leave Funding) Corporation (Corporation) is
currently undertaking a Transitional Service Review. The provision in the Act
provides that Eligible Employees and Former Employees can make application to
the Corporation for recognition of period or periods of employment service
between 1 January 2000 and December 2011 in the Black Coal Mining Industry that
may not be presently recognised and recorded by the Corporation. The Corporation
has not recognised levies attributable to those employers of Eligible Employees
and Former Employees that previously did not contribute to the Corporation.
At balance date, the amounts that would be receivable are not reliably measurable.
Additionally, at any time various Australian Government entities are pursuing various
other claims and legal actions that are pending court or other processes.
129
Contingent liabilities excluded on the basis of remoteness

A significant remote contingent liability is a possible obligation that would be material
to the CFS, but where the probability of settlement is considered very low (less than
five per cent).
The disclosure of remote contingencies is not required under AAS but is listed below
for transparency. Further detail on individual remote contingencies may be included in
the annual report for the respective Commonwealth entity:
Research and Development (administered by the Department of Agriculture).

Under several Acts, the Commonwealth provides contributions to a number of
nominated entities responsible for undertaking research and development activities
in respect of portfolio industries. These contributions are typically made on a
matching basis. At 30 June 2015, the Commonwealth had a maximum potential
liability in respect of matching payments of approximately $444 million
(30 June 2014: $401 million). The likelihood of meeting the eligibility requirements
and the amount of future payments is uncertain. Hence, the total liability is
considered unquantifiable.
Foreign currency denominated loans (administered by the Australian Office of

Financial Management). Indemnifies agents of foreign currency denominated loans
issued by the Australian Government outside Australia against any loss, liability,
costs, claims, charges, expenses, actions, or demands due to any misrepresentation
by the Australian Government and any breach of warranties. The
Australian Government is not aware of any event that has occurred that may
trigger action under the indemnities.
Financial Claims Scheme Deposits (administered by the Australian Prudential

Regulation Authority (APRA)). Provides depositors of authorised deposit-taking
institutions and general insurance policyholders with timely access to their funds in
the event of a financial institution failure. Authorised under the Banking Act 1959
and available from 1 February 2012, deposits up to $250,000 at eligible authorised
deposit-taking institutions are covered under the Financial Claims Scheme. This
$250,000 cap has no expiry date. When last estimated as at 31 December 2014,
deposits eligible for coverage under the Financial Claims Scheme were
approximately $766 billion (2014: $722.8 billion);
Financial Claims Scheme Insurance (administered by APRA). The Policyholder

Compensation Facility established under the Insurance Act 1973 provides a
mechanism for making payments to eligible beneficiaries with a valid claim against
a failed general insurer. Amounts available to meet payments and administer both
facilities, in the event of activation, are capped at $20.1 billion under the legislation.
Any payments made under the Financial Claims Scheme would be recovered
through the liquidation of the failed institution. If there were a shortfall, a levy
would be applied to industry to recover the difference between the amount
expended and the amount recovered in the liquidation;
130
Telstra Financial Guarantee (administered by the Department of

Communications). Provides a guarantee to Telstra in respect of NBN Cos financial
obligations to Telstra under the Definitive Agreements (as amended on
14 December 2014). The liabilities under the agreements between Telstra and
NBN Co arise progressively during the roll out of the National Broadband Network
as Telstras infrastructure is accessed and Telstras customers are disconnected from
its copper and hybrid-fibre coaxial cable networks. The Australian Government is
only liable in the event NBN Co does not pay an amount under the Definitive
Agreements when due. As at 30 June 2015, NBN Co had generated liabilities which
it had not paid and that were covered by the guarantee estimated at $3.9 billion.
The guarantee will terminate when NBN Co achieves specified credit ratings for a
period of two continuous years and either: the company is capitalised by the
Commonwealth to the agreed amount; or the Communications Minister declares
that the National Broadband Network should be treated as built and fully
operational. The Australian Government also provides a guarantee to Optus of
NBN Cos financial obligations to Optus under the Optus HFC Subscriber. As at
30 June 2015, the liabilities covered by the guarantee were not material to the CFS;
Equity Funding Agreement with NBN Co (administered by the Department of

Communications). The Australian Government (GGS) has an Equity Funding
Agreement with NBN Co (which is consolidated into the PNFC sector). Under the
agreement, the Australian Government is committed, in the event of a termination
of the national broadband network roll out, to provide sufficient funds to NBN Co
to meet its direct costs arising from that termination. As at 30 June 2015, NBN Cos
termination liabilities were estimated at $8.5 billion (2014: $6.7 billion). This
cross-sector guarantee is internal to the Australian Government;
Space Activities Act 1998 (administered by the Department of Industry and

Science). The Australian Government is liable under the UN Convention on
International Liability for Damage Caused by Space Objects for damage caused to third
party States, including persons and property of that State, by space objects
launched from, or by, Australia or Australian nationals. The Space Activities
Act 1998 requires the launch operator to insure against liability up to a prescribed
amount, with the Australian Government bearing any liability above this amount.
The Australian Government also accepts liability for damage suffered by Australian
nationals, to a maximum value of $3 billion above the insured level;
Tripartite deeds relating to the sale of core regulated airports (administered by

the Department of Infrastructure and Regional Development). The tripartite deeds
between the Australian Government, the airport lessee companies and financiers
amend the airport (head) leases to provide for limited step-in-rights for financiers
in circumstances where the Australian Government terminates the head lease to
enable the financiers to correct the circumstances that triggered such a termination
event. The tripartite deeds may require the Australian Government to pay
financiers compensation as a result of its termination of the (head) lease;
131
New South Wales Rural Fire Fighting Service (NSW RFS) in relation to the Jervis
Bay Territory (new) (administered by the Department of Infrastructure and
Regional Development). An uncapped indemnity has been provided for any
damage caused as a result of the actions of the NSW RFS in the Jervis Bay Territory
while fighting a fire. The likelihood of an event occurring has been assessed as very
remote and the risks are currently mitigated through the training and professional
qualifications of the NSW RFS staff;
Indian Ocean Territories Service Delivery Arrangement (administered by the

Department of Infrastructure and Regional Development). Indemnities have been
provided to the Western Australian Government, their respective officers, agents,
contractors and employees against civil claims relating to their employment and
conduct as officers as part of the Service Delivery Arrangement in the Indian Ocean
Territories. The likelihood has been assessed as remote and the risks are currently
mitigated through the training and professional qualifications of the staff of these
agencies;
Defence-related remote contingencies. At 30 June 2015, Defence had

1,437 (2013-14: 1,597) instances of quantifiable remote contingent liabilities valued
at $3.8 billion (2013-14: $3.7 billion) and another nine unquantifiable remote
contingent liabilities. A significant remote contingency includes proceedings in
relation to Cockatoo Island Dockyard (CODOCK). Following a final court decision
in 2006, CODOCK was awarded a complete indemnity from the Australian
Government for its uninsured exposure to asbestos damages claims
(plus 7.5 per cent profit);
Export Finance Insurance Corporation (EFIC) Commercial Account (administered

by the Department of Foreign Affairs and Trade). Under the Export Finance and
Insurance Corporation Act 1991, the Australian Government (GGS) guarantees EFICs
(which is consolidated into the PFC sector) creditors. The guarantee covers the EFIC
Commercial Account and has a $200 million callable capital facility available for
this purpose. This guarantee has never been utilised. As at 30 June 2015, the
guarantee covered estimated liabilities of $3.5 billion (2014: $3.3 billion). This
cross-sector guarantee is internal to the Australian Government;
Commonwealth Bank of Australia and Commonwealth Bank of Australia

Officers Super Fund (administered by the Department of the Treasury). Under the
terms of the Commonwealth Bank Sale Act 1995, the Australian Government has
guaranteed various liabilities of the Commonwealth Bank of Australia (CBA), and
the Commonwealth Bank Officers Superannuation Corporation (CBOSC). The
guarantee of the covered CBA liabilities was estimated at $4.4 billion at
30 June 2015 (2014: $4.4 billion) and the covered CBOSC liabilities were estimated at
$0.5 billion at 30 June 2015 (2014: $0.7 billion);
132
Guarantee of large deposits in authorised deposit taking institutions

(administered by the Department of the Treasury). Available to eligible deposits
above $1 million issued between 12 October 2008 and 31 March 2010. Eligible term
deposits were guaranteed for up to five years and at-call deposits until
October 2015. As at 30 June 2015, total liabilities covered by the Scheme were
estimated at $1.45 billion. The guarantee also operated for wholesale funding issued
between the above dates. This funding has all since matured;
Guarantee of state and territory borrowing (administered by the Department of

the Treasury). Available to state and territory governments on a voluntary basis for
borrowings issued between 24 July 2009 and 31 December 2010.
Australian Government expenditure would arise under the guarantee only in the
unlikely event that a state or territory failed to meet its obligations with respect to a
commitment that was subject to the guarantee and the guarantee was called upon.
The Government would likely be able to recover any such expenditure through a
claim on the relevant state or territory at a future date. As at 30 June 2015, the face
value of borrowings covered by the guarantee was $11.7 billion (2014: $15.7 billion);
and
Reserve Bank of Australia (RBA) liabilities (administered by the Department of

the Treasury). Under the Reserve Bank of Australia Act 1959, the
Australian Government (GGS) guarantees the RBAs (which is consolidated into the
PFC sector) liabilities. As at 30 June 2015, the guarantee was valued at $65.5 billion
(2014: $60.8 billion). This cross-sector guarantee is internal to the Australian
Government.
133
Note 12B: Financial instruments
(a) Categories of financial instruments

The classification of financial assets depends on the purpose for which they were
acquired. The Australian Government classifies its financial assets into the following
categories:
Financial assets at
Loans and Held-to-maturity
fair value through Available-for-sale
receivables investments
profit or loss
Financial assets Non-derivative Non-derivative Principally
held for trading, and financial assets with financial assets with marketable equity
those designated at fixed or fixed or securities, are
fair value through determinable determinable non-derivatives that
profit or loss. payments that are payments and fixed are either
Derivatives are not quoted in an maturities where designated in this
categorised as held active market there is a positive category or not
for trading unless intention and ability classified in any of
they are designated to hold to maturity the other categories
as hedges
Similarly, the classification of financial liabilities depends on the purpose for which the
liabilities were entered into. The Australian Government classifies its financial
liabilities in the following categories:
financial liabilities at fair value through profit or loss; and
other liabilities.
Categories of financial instruments by value

General Australian
Government Government
2015 2014 2015 2014
$m $m $m $m
Financial assets
Loans and receivables 26,870 19,511 112,118 97,041
Financial assets at fair value through
profit or loss 188,771 167,573 221,501 203,208
Held to maturity 3,544 3,502 3,963 3,584
Available for sale 51,674 46,305 13,346 11,810
Carrying amount of financial assets 270,859 236,891 350,928 315,643
Financial liabilities
Financial liabilities at fair value through
profit or loss 412,401 353,499 409,350 351,223
Other financial liabilities 25,579 26,429 128,476 126,890
Carrying amount of financial liabilities 437,980 379,928 537,826 478,113
134
Available-for-sale financial assets and financial assets at fair value through profit or
loss are subsequently carried at fair value. Loans and receivables and held-to-maturity
investments are subsequently carried at amortised cost using the effective interest
method less impairment. For financial assets at fair value through profit or loss, gains
and losses arising from changes in the fair value are included as other economic flows
in the operating statement in the period in which they arise.
Certain financial assets categorised as loans and receivables and measured at

amortised cost are initially measured at fair value using a valuation method as a
quoted price was not observable. In addition, the investment in the IMF quota is
classified as available for sale but is measured at cost as fair value cannot be reliably
measured due to its unique nature.
Impairment of financial assets

Financial assets are assessed for impairment at each balance date. If there is objective
evidence that an impairment loss has been incurred it is recognised as follows:
Financial asset Recognition of impairment
Measurement of impairment loss
category loss
Financial assets held Difference between the carrying carrying amount is
at amortised cost: amount and the present value of reduced by way of an
loans and receivables estimated future cash flows allowance account
or held to maturity discounted at the assets original loss is recognised in the
investments held at effective interest rate operating statement as an
amortised cost other economic flow.
Financial assets held Difference between the carrying loss is recognised in the
at cost: unquoted amount of the asset and the operating statement as an
equity instrument held present value of the estimated other economic flow.
at cost (because fair future cash flows discounted at the
value cannot be current market rate for similar
reliably measured) or assets
a linked derivative
asset
Available for sale Difference between its cost, less transferred from equity
financial assets principal repayments and (net worth) to the
amortisation, and its fair value, less operating statement as an
any impairment loss previously other economic flow.
recognised in the operating
statement
Derecognition of financial assets and liabilities

Financial assets are derecognised when the contractual rights to the cash flows from
the financial asset expire or the asset is transferred to another entity. In the case of a
transfer to another entity, it is necessary that the risks and rewards of ownership are
also transferred. Financial liabilities are derecognised when the obligation under the
contract is discharged, cancelled or expired.
135
Fair value
The fair values of Australian Government and GGS financial assets and liabilities
approximate their carrying amounts as reported in the CFS, with the exception of the
subsequent measurement of concessional loans categorised as loans and receivables
under AASB 139 Financial Instruments: Recognition and Measurement. Subsequent to
recognition, these loans are carried at amortised cost which may differ to an updated
fair value.
Net income, expense and other economic flows from financial assets
General Australian
2015 2014 2015 2014 (a)
$m $m $m $m
Loans and receivables
Interest income 510 493 311 1,157
Net gain/(loss) on disposal 1 - 8 -
Net foreign exchange gain/(loss) (5) 3 (3) 11
Write-down and impairment (249) (381) (262) (384)
Interest expenses (18) (29) (18) (29)
Net gain/(loss) 239 86 36 755
Available for sale

Interest income 2 1 29 25
Dividend income 2,344 1,727 38 38
Net gain/(loss) on disposal (1) - (1) -
Net foreign exchange gain/(loss) 626 (366) 626 (366)
Write-down and impairment - (150) - (150)
Fair value movements in equity 3,158 7,679 383 282
Net gain/(loss) 6,129 8,891 1,075 (171)
Held for trading

Interest income - - 1,527 353
Net gain/(loss) on disposal - - - 11
Net gain/(loss) - - 1,527 364
Fair value through profit and loss

Interest income 3,520 3,318 3,574 3,380
Net gain/(loss) on disposal 6,965 6,111 6,874 6,114
Dividend income 3,833 2,378 3,889 2,421
Net foreign exchange gain/(loss) (2,317) 41 3,829 187
Write-down and impairment (7) (7) (7) (7)
Interest expenses (517) (296) (517) (296)
Other gains 11,955 3,040 7,964 3,161
Net gain/(loss) 23,432 14,585 25,606 14,960
Held to maturity
Interest income 135 139 158 176
Net gain/(loss) on disposal - - - (3)
Net foreign exchange gain/(loss) 2 - 2 -
Net gain/(loss) 137 139 160 173
(a) The 2013-14 Australian Government comparatives have been updated to exclude Medibank Private
Limited as a discontinued operation.
136
Net income, expense and other economic flows from financial liabilities
General Australian
2015 2014 2015 2014 (a)
$m $m $m $m
Held at fair value through profit and loss
Interest expenses 16,534 14,950 16,397 14,811
Other gains (8,197) (3,687) (8,197) (3,687)
Net gain/(loss) held at fair value
through profit and loss 8,337 11,263 8,200 11,124
Other financial liabilities
Interest expenses 388 399 1,356 1,115
Net foreign exchange gain/(loss) (641) (80) (647) (79)
Net gain/(loss) other financial liabilities (253) 319 709 1,036
(a) The 2013-14 Australian Government comparatives have been updated to exclude Medibank Private
Limited as a discontinued operation.
(b) Financial management objectives and market risk

Market risk represents the risk that the fair value or future cash flows of a financial
instrument will fluctuate due to changes in market prices. Market risk comprises
currency risk, interest rate risk and other price risks. The management of market risk
by Australian Government entities is governed by the Public Governance, Performance
and Accountability Act 2013 (PGPA Act) and, for some entities such as the RBA, specific
legislation.
The three sectors of government: GGS, PNFC and PFC; hold financial instruments for
different purposes and with different market risk exposures. Consequently, the
following discussion of financial management objectives and market risk has been
disaggregated by sector. Where material, the discussion includes a sensitivity analysis
for each type of market risk exposure showing the effect on the net operating balance
and net worth resulting from reasonably possible changes in market risk at
30 June 2015.
Generally, in applying the sensitivity analysis as at 30 June 2015, a default rate of

10.9 per cent (2014: 11.5 per cent) has been applied for the sensitivity analysis of
foreign exchange risk and 40 to 100 basis points for the sensitivity analysis of interest
rate risk. However, for certain financial instruments, different sensitivity rates have
been used based on the relevant entitys assessment of changes in risk variables that
were considered reasonably possible at the reporting date with regard to the nature of
the underlying financial instrument.
General government sector

GGS entities hold financial instruments as part of their operations or for public policy
purposes.
137
Management of interest rate risk in the general government sector

Commonwealth entities subject to the PGPA Act are required to draw down
administered and departmental monies on an as-needed basis. As a general principle,
Commonwealth general government entities cannot invest public monies except as
delegated under section 58 of the PGPA Act or authorised by legislation. Corporate
Commonwealth entities subject to the PGPA Act are also restricted in how they can
invest monies that are surplus to operational requirements. As a general principle,
surplus money may only be placed on deposit with a bank or invested directly in
securities issued or guaranteed by the Australian Government, a state or a territory,
unless an exemption is approved by the Finance Minister. Financial assets held by the
majority of GGS entities are non-interest bearing, including trade receivables, or have
fixed interest and do not fluctuate due to changes in the market interest rate.
The Treasurer has delegated investment powers to the Australian Office of Financial
Management (AOFM). The AOFMs functions give it primary responsibility for
ensuring that the Australian Government has sufficient cash to meet its needs. As at
30 June 2015, AOFM had deposited $34.3 billion in term deposits with the RBA on
behalf of the Australian Government (2014: $27.1 billion). As these investments are
internal to the Australian Government reporting entity, they are not reported in the
CFS, except at the general government level.
Investment funds
The Australian Government Investment Funds currently comprise:
Future Fund;
DisabilityCare Australia Fund (DCAF);
Building Australia Fund (BAF);
Education Investment Fund (EIF); and
Health and Hospitals Fund (HHF).
The Future Fund was established by the Future Fund Act 2006 to finance the Australian
Governments unfunded public sector superannuation liability. The Future Fund
Board of Guardians is responsible for the investment decisions of the Fund under an
Investment Mandate issued by the Australian Government. The Investment Mandate
requires the Board to maximise returns above a benchmark rate whilst taking
acceptable but not excessive risk. The benchmark rate has been set at the Consumer
Price Index (CPI) plus 4.5 per cent to 5.5 per cent per annum over the long term.
Section 58 of the PGPA Act does not apply to investments of the fund.
The DCAF is an investment fund which will reimburse Commonwealth and state and
territory governments for the costs relating to the National Disability Insurance
Scheme.
138
The Nation Building Funds (BAF, EIF and HHF) are designed to provide financing
resources for critical areas of infrastructure.
The DCAF and Nation Building Funds are also managed by the Future Fund
Management Agency and the Future Fund Board of Guardians and operate under the
same governance arrangements.
As at 30 June 2015, the Funds exposures to interest rates, in respect of securities held,
was:
Floating interest rates Fixed interest rates

2015 2014 2015 2014
$m $m $m $m
Future Fund 8,810 11,037 17,517 17,387
Other Investment Funds 7,390 6,045 3,989 3,557
The following table details the impact on the net operating balance and net worth of a
40 basis point (2014: 60 basis point) change in the Funds interest rate bond yield with
all other variables held constant.
Effect on Effect on
Change in Operating Net Operating Net worth
risk balance worth balance
Interest rate risk variable
2015 2015 2014 2014
$m $m $m $m
Future Fund +40bp (525) (525) n/a n/a
-40bp 544 544 n/a n/a
+60bp n/a n/a (308) (308)
-60bp n/a n/a 328 328
Other Investment Funds +40 bp 21 21 n/a n/a
-40 bp (19) (19) n/a n/a
+60 bp n/a n/a 40 40
-60 bp n/a n/a (38) (38)
Exchange traded interest rate futures are used by the Future Funds investment
managers to manage the exposure to interest rates and to ensure it remains within
approved limits. At 30 June 2015, the notional value of open futures contracts and
swaps totalled $12,526 million (2014: $8,982 million).
The other administered funds had open positions in exchange traded interest rate
futures contracts as at 30 June 2015. The notional value of investments in sell
international interest rate futures contracts was negative $1,054 million (2014: negative
$1,323 million).
139
Financial assets held for policy purposes
The GGS also holds certain financial assets and liabilities for public policy purposes.
These include:
Residential mortgage-backed securities (RMBS) (administered by the AOFM) to

support competition in the Australian residential mortgage market. Initiated in
September 2008 and extended in October 2008 and again in November 2009 to a
total program of up to $20 billion. In April 2013, the Government announced that
due to improvements in market conditions, the AOFM would not make any new
investments in RMBS. On behalf of the Australian Government, the AOFM
acquired a total of $15,462 million of AAA (or equivalent) rated RMBS up to
30 June 2015. The amount held as at 30 June was $4,261 million (in principal
terms). Interest earned on RMBS comprises a floating interest rate (set against the
one-month Bank Bill Swap (BBSW) reference rate) plus a fixed margin set at the
time each investment is acquired. The following table shows the sensitivity to a
change in the one-month BBSW rate.
Effect on Effect on
2015 2015 2014 2014
$m $m $m $m
Residential mortgage backed +100 bp 34 34 51 51
securities -100 bp (34) (34) (51) (51)
Concessional loans held for policy purposes The Australian Government has
entered into a number of concessional loan arrangements for policy purposes.
These include student loans provided under the Higher Education Loan
Programme (2015: $30,445 million, 2014: $25,147 million) and loans to state and
territory governments under previous Commonwealth-State financing
arrangements (2015: $2,033 million, 2014: $2,106 million). Student loans have
been designated as held at fair value through profit and loss. Changes in market
interest rates will impact on the fair value of these loans but will have no impact
on the future cash flows or principal amounts at maturity. Loans to state and
territory governments are borrowings for a fixed period with regular
repayments, which comprise principal and interest components, and a fixed
interest rate. Other concessional loans have been designated as loans and
receivables and have no exposure to interest rate risk.
Other material financial assets held for policy purposes (rather than liquidity
management) include: Australias subscription to the Asian Development Fund and
International Development Association; the IMF quota; investments in international
financial institutions; and, at the general government level, the investment in public
corporations.
140
Debt management
The majority of GGS entities are prohibited from borrowing. The AOFM is responsible
for the borrowing activities of the GGS and for overall debt management. For many
years, debt issuance by the Australian Government was undertaken solely with the
objective of maintaining the Treasury Bond and Treasury Bond futures markets, as
successive budget surpluses removed the need to borrow to fund the Budget. The
forecast Budget outlook changed in the Updated Economic and Fiscal Outlook published
on 3 February 2009 and the objective of issuance changed to funding the Budget. As a
means of diversifying its funding sources, in September 2009, the
Australian Government resumed issuance of Treasury Indexed Bonds.
The main types of market risk the Australian Governments debt portfolio is exposed
to is domestic interest rate risk and domestic inflation risk. Moreover, by generally
issuing/buying and holding to maturity, the market risk most relevant to the debt
portfolio is the risk of fluctuations to future interest cash flows and principal amounts
arising from changes in interest rates and inflation. In market value terms, as at
30 June 2015, the AOFM had issued $409,936 million in Commonwealth Government
Securities (2014: $351,275 million). The following table provides a sensitivity analysis
of interest rate risk in relation to the debt portfolio.
Effect on Effect on
Change in Operating Net worth Operating Net worth
risk balance balance
2015 2015 2014 2014
$m $m $m $m
Treasury bonds +100 bp (386) (386) (230) (230)
-100 bp 437 437 269 269
Treasury notes +100 bp (49) (49) (40) (40)
-100 bp 49 49 40 40
Management of currency risk in the general government sector

Entities in the GGS are responsible for the management of their foreign exchange risks.
However, it is Australian Government policy that these entities do not act to reduce
the foreign exchange risk that they would otherwise face in the course of their business
arrangements. This means that GGS entities are not permitted to undertake any form
of hedging. Rather than allowing GGS entities to enter into individual hedging
arrangements, the Australian Government has taken a decision to self-insure foreign
exchange exposures and not accept the additional costs associated with hedging. This
is based on the view that, as a large organisation, the Australian Government has a
broad spread of assets and liabilities and a range of revenues and expenses, both
geographically and across classes, which assists in the management of movements in
exchange rates.
The Future Fund undertakes certain transactions denominated in foreign currencies,

hence it is exposed to the effects of exchange rate fluctuations. Exchange rate
141
exposures are managed utilising forward foreign exchange contracts. The Funds
exposure in Australian equivalents to foreign currency risk at 30 June 2015 totalled
$80,737 million (2014: $67,945 million). After adjusting for forward exchange contracts,
the Funds net exposure at 30 June 2015 amounted to $49,220 million (2014:
$44,841 million). The Funds exposures are in multiple currencies, primarily US dollar,
Euro, Yen and the UK Pound.
The following table demonstrates the impact on the net operating balance and net
worth, of a 10.9 per cent movement (2014: 11.5 per cent movement) in the value of the
Australian dollar (AUD) relative to the basket of actual net exposures.
Effect on Effect on
Currency risk variable
2015 2015 2014 2014
$m $m $m $m
Investments +10.9% 4,667 4,667 n/a n/a
-10.9% (4,587) (4,587) n/a n/a
+11.5% n/a n/a 5,460 5,460
-11.5% n/a n/a (5,411) (5,411)
The Australian Government holds several financial instruments as part of its

membership of the IMF and its investment in international financial institutions and
multilateral aid organisations. These financial instruments include the:
IMF quota (financial assets), comprising the current value in AUD of Australias
subscription to the IMF (2015: $5,913 million, 2014: $5,306 million);
investment in international financial institutions, including the European Bank

for Reconstruction and Development, the International Bank for Reconstruction
and Development, the International Finance Corporation, the Asian
Development Bank and the Multilateral Investment Guarantee Agency (2015:
$1,013 million, 2014: $857 million);
subscription based membership rights (not control) held by the Australian

Government in accordance with the articles of association for the International
Development Association and the Asian Development Fund, which are
recognised at fair value (2015: $1,936 million, 2014: $1,545 million);
promissory notes (financial liability) issued to the IMF and international financial
institutions (2015: $4,825 million, 2014: $3,904 million). The promissory notes are
non-interest bearing and relate to the undrawn paid-in capital subscriptions; and
the SDR allocation liability which reflects the current value in AUD of the
Treasurys liability to repay to the IMF Australias cumulative allocations of SDRs
(2015: $5,633 million, 2014: $5,054 million).
142
The Australian Government is exposed to foreign currency denominated in US dollars,

Euro and SDR on the above financial instruments. The following table details the
impact on the net operating balance and net worth of an 11 per cent (2014: 12 per cent)
movement in the value of the AUD relative to financial instruments associated with
the IMF and international financial institutions, and a 10.9 per cent (2014: 11.5 per cent)
movement for financial instruments associated with multi-lateral aid organisations.
Effect on Effect on
2015 2015 2014 2014
$m $m $m $m
Loans + 10.9% (191) (191) n/a n/a
- 10.9% 238 238 n/a n/a
+ 11.5% n/a n/a (159) (159)
- 11.5% n/a n/a 201 201
International Monetary Fund + 11.0% (581) (581) n/a n/a
+ 11.0% 723 723 n/a n/a
+ 12.0% n/a n/a (547) (547)
- 12.0% n/a n/a 689 689
Management of other price risk in the general government sector

The Australian Government is exposed to equity price risks arising from equity
investments, primarily through Future Fund investments. The equity price risk is the
risk that the value of the equity portfolio will decrease as a result of changes in the
levels of equity indices and the price of individual stocks. The Future Fund holds all of
its equities at fair value through profit or loss.
As at 30 June 2015, the Future Funds exposure to equity price risk consisted of
$11,001 million in domestic listed equities and listed managed investment schemes
(2014: $11,190 million) and $30,883 million in international listed equities and listed
management schemes (2014: $27,225 million).
The following table demonstrates the impact on the net operating balance and net
worth of a +/- 20 per cent change in domestic equities and a +/- 15 per cent change in
international equities held by the Future Fund.
143
Effect on Effect on
Other price risk variable
2015 2015 2014 2014
$m $m $m $m
Assets
Australian equities + 20% 2,869 2,869 3,045 3,045
- 20% (2,724) (2,724) (2,986) (2,986)
International equities + 15% 9,259 9,259 8,327 8,327
- 15% (8,543) (8,543) (7,916) (7,916)
The Fund had open positions in exchange traded equity futures contracts and equity
option contracts as at 30 June 2015. The exchange traded equity futures, swaps and
options are used to manage market exposures to equity price risk to ensure that asset
allocations remain within the Funds approved limits. The notional value of the open
contracts and their fair market value are set out below.
Notional Fair Notional Fair

value market value market
Equity price risk value value
2015 2015 2014 2014
$m $m $m $m
Buy domestic equity futures contracts 220 (5) 100 -
Sell domestic equity futures contracts (2,233) 44 (497) -
Buy international equity futures contracts 2,705 (44) 7,115 37
Sell international equity futures contracts (1,681) 36 - -
Sell equity index swap agreements (18) - - -
Exchange traded international volatility
index call options 1 1 1 -
Over the counter domestic equity
index put options (46) 3 (8) -
Over the counter domestic equity
index call options 281 21 214 16
Over the counter international equity
index put options (1,060) 70 (420) 26
Over the counter international equity
index call options 4,537 597 2,815 350
Exchange traded warrants - - 95 159
Total 2,706 723 9,415 588
The Australian Government is exposed to cash flow risk on Treasury Capital Indexed
Bonds on issue. These instruments expose the Australian Government to cash flow risk
on interest payments and the value of principal payable on maturity arising from
indexation against the (all groups) Australian CPI. When the CPI increases, debt
servicing costs and the principal payable on maturity will also rise (subject to a
six-month lag).
144
At 1 July 2014, if the CPI had experienced an immediate one per cent
increase/(decrease) and that change were to persist for 12 months to 30 June 2015 with
all other variables held constant, the effect on the net operating balance and net worth
position for the year ended 30 June 2015 would be as follows:
Effect on Effect on
CPI sensitivity analysis variable
2015 2015 2014 2014
$m $m $m $m
Treasury Capital Indexed Bonds +1% (369) (369) (309) (309)
- 1% 363 363 315 315
Public financial corporations

The PFC sector comprises the RBA and other similar entities.
The RBA is Australias central bank. Its role is set out in the Reserve Bank Act 1959. The
RBAs main responsibility is monetary policy. In addition to conducting monetary
policy, the RBA also holds Australias foreign currency reserves, operates Australias
main high-value payments system, provides banking services to the Australian
Government and designs, produces and issues Australias banknotes. In undertaking
these functions, the RBA has significant exposures to interest rate and currency risk.
The Export Finance and Insurance Corporation (EFIC) is also involved in lending and
borrowing activities with exposures to interest rate and currency risk.
In the PFC sector the market operations of the RBA and EFIC make up the
overwhelming majority of the sectors exposure to market risk. The following market
risk disclosures are therefore limited to the market operations of the RBA and EFIC.
Management of interest rate risk in the public financial corporations sector

The RBAs balance sheet is exposed to considerable interest rate risk because most of
its assets are financial assets, such as domestic and foreign securities, which have a
fixed income stream. The price of such securities increases when market interest rates
decline, while the price of a security will fall if market rates rise. Interest rate risk
increases with the maturity of a security because the associated income stream is fixed
for a longer period.
145
The following table shows the sensitivity to a change in interest rate variables.
Effect on Effect on
2015 2015 2014 2014
$m $m $m $m
Foreign currency securities +100 bp 300 300 365 365
-100 bp (300) (300) (365) (365)
Australian dollar securities +100 bp 156 156 131 131
-100 bp (156) (156) (131) (131)
As EFIC is also involved in lending and borrowing activities, interest rate risks arise.
EFIC uses interest rate swaps, forward rate agreements, cross-currency swaps and
futures as the primary methods of reducing exposure to interest rate movements.
Management of currency risk in the public financial corporations sector

Foreign exchange risk arises from the RBAs foreign currency assets, which are held to
support the RBAs operations in the foreign exchange market. The overall level of
foreign currency exposure is determined by policy considerations and cannot
otherwise be managed to reduce foreign exchange risk. The RBAs net foreign
currency exposure as at 30 June 2015 was $50 billion (2014: $42 billion). Within the
overall exposure and to a limited extent, foreign currency risk can be reduced by
holding assets across a diversified portfolio of currencies.
The RBA holds foreign reserves in several currencies the US dollar (55 per cent of
net foreign currency holdings), the Euro (25 per cent), the Canadian dollar (5 per cent),
the Yen (5 per cent), the Chinese renminbi (5 per cent) and the UK pound sterling
(5 per cent) because the markets for these currencies are typically liquid and
suitable for investing foreign exchange reserves. The RBA also operates in foreign
exchange markets on behalf of its clients, including to assist the
Australian Government in meeting foreign currency obligations. The following table
demonstrates the RBAs sensitivity to a movement of +/-10 per cent in the value of the
AUD exchange rate as at 30 June 2015.
Effect on Effect on
2015 2015 2014 2014
$m $m $m $m
Australian dollar exchange rate + 10% (4,547) (4,547) (3,849) (3,849)

- 10% 5,557 5,557 4,704 4,704
146
The RBA undertakes foreign currency swaps to assist its daily domestic market
operations. These instruments carry no foreign exchange risk since the exchange rates
at which both legs of the transaction are settled are agreed at the time the swap is
undertaken.
EFIC extends facilities in various currencies, principally in US dollars and Euros.

Where the borrowing currency is different from the currency of the assets being
funded, cross-currency swaps, or the foreign exchange markets are used to offset the
exposure (before provisions). EFICs exposure in AUD to foreign currency risk at
30 June 2015 totalled $3,013 million on financial assets and $3,044 million on financial
liabilities giving a net exposure of negative $31 million (2014: negative $22 million).
Public non-financial corporations

The PNFC entities primarily hold financial instruments as a direct result of operations,
including trade receivables and payables, or to finance operations. Certain entities in
the PNFC sector also enter into derivative transactions, including interest rate swaps,
forward currency contracts and commodity swap contracts. The purpose is to manage
the interest rate, currency and commodity risks arising from the entitys operations
and sources of finance.
(c) Credit risk

Credit risk in relation to financial assets, is the risk that a third party will not meet its
obligations in accordance with agreed terms. Generally, the Australian Governments
maximum exposure to credit risk in relation to each class of recognised financial asset
is the carrying amount of those assets as indicated in the consolidated balance sheet.
The following table shows the credit quality of financial receivables reported in the
CFS that are not past due or individually determined as impaired.
2015 2014 2015 2014

Not Past Not Past Past Past
Due Nor Due Nor Due or Due or
Impaired Impaired Impaired Impaired
$m $m $m $m
Advances and loans 41,682 34,752 88 82
Goods and services receivable 1,262 1,301 245 359
Other receivables 3,488 3,593 817 720
Total 46,432 39,646 1,150 1,161
General Government
Advances and loans 40,570 33,958 88 82
Goods and services receivable 609 476 122 193
Other receivables 5,584 4,416 776 720
Total 46,763 38,850 986 995
147
The following table shows the ageing of financial receivables that are past due but not
impaired for 2015:
0 to 30 30 to 60 60 to 90 over 90 Total
days days days days
$m $m $m $m $m
Advances and loans 38 23 7 20 88
Goods and services receivable 131 37 25 52 245
Other receivables(a) 84 29 28 676 817
Total 253 89 60 748 1,150
General Government
Total 145 80 53 708 986
(a) Excludes statutory receivables such as taxes receivable and personal benefits recoverable.
The following table provides the corresponding information for 2014:
0 to 30 30 to 60 60 to 90 over 90 Total
days days days days
$m $m $m $m $m
Total 276 103 70 712 1,161
General Government
Total 183 78 65 669 995
(a) Excludes statutory receivables such as taxes receivable and personal benefits recoverable.
The following table illustrates changes in the fair value of loans and receivables
designated at fair value through profit and loss that arose due to credit risk:
2015 2014
$m $m
Fair value changes due to credit risk:
During the period 1,442 1,055
Prior Period 8,787 7,160
Cumulative change 10,229 8,215
148
Australian Government entities have assessed the risk of default on payment and have
allocated $236 million to the impairment allowance for advances and loans at
30 June 2015 (2014: $229 million) and $754 million to the impairment allowance for
goods and services and other receivables at 30 June 2015 (2014: $1,978 million).
The majority of Australian Government entities do not have significant exposures to

any concentrations of credit risk. Generally, Australian Government entities
exposures are to a large number of customers or highly rated counterparties and their
credit risks are very low. Australian Government entities that do have material
concentrations of credit risk include:
the Future Fund has a significant exposure to interest bearing securities issued by
domestic banks (including domestic subsidiaries of foreign banks);
EFICs principal exposure to credit risk arises from the financing and credit
facilities extended to clients. Exposures on the commercial account amounted to
$2,042 million at 30 June 2015 (2014: $1,871 million) and on the national interest
account amounted to $915 million (2014: $867 million);
the AOFMs financial investments include loans to state and territory

governments, deposits, discount securities and RMBS. The credit quality of the
RMBS derives from the underlying quality of the mortgage assets and structural
enhancements such as lenders mortgage insurance, liquidity facilities, and the
issue of different classes of securities. At the time of acquisition, each RMBS issue
must meet a range of eligibility criteria set by the AOFM;
for the RBA, credit risk arises from exposure to the issuers of securities that it
holds; banks with which the RBA deposits funds and counterparties that are yet
to settle transactions. The RBAs credit exposure is low compared with that of
most commercial financial institutions because it manages such risks within a
highly risk-averse framework; and
from time to time the Australian Government may have significant exposures to
credit risk in relation to major asset sales.
Collateral
With the exception of the following, the majority of Australian Government entities do
not hold collateral to manage credit risk. Cash invested by the RBA under repurchase
agreements is secured by collateral to a value of between 101 and 127 per cent of the
amount invested. In relation to Indigenous Business Australias gross credit risk,
collateral valued at $1,403 million is held against home and business loans
(2014: $1,370 million). For EFIC, collateral held may include first ranking mortgages
over assets financed by EFIC, standby documentary credits, third-party guarantees
and recourse to companies and company directors. No collateral has currently been
called and held at year end.
149
(d) Liquidity risk

Liquidity risk is the risk that the Australian Government will not be able to meet its
obligations as they fall due. The following tables disclose the undiscounted value of
the contractual maturities of financial liabilities as at the end of the financial year,
including estimated future interest payments.
The Australian Government has sufficient access to funds to meet its liabilities as they
fall due. The Australian Government is positioned to address liquidity risk through
existing revenue sources, including the power to tax, and its capacity to roll over
existing debt:
150
Liquidity risk(a)(b)
2015 2014 (d)
On 1 Year 1 to 5 More than Total On 1 Year 1 to 5 More than Total
Demand or Less Years 5 Years(c) Demand or Less Years 5 Years(c)
$m $m $m $m $m $m $m $m $m $m
Suppliers 212 6,403 120 2 6,737 977 4,798 150 28 5,953
Subsidies payable - 171 - - 171 - 430 - - 430
Grants liability 17 2,422 930 275 3,644 21 2,461 982 394 3,858
Other payables 200 3,887 1,076 245 5,408 347 2,457 715 32 3,551
Deposits 11,398 13,726 - - 25,124 12,178 11,820 - - 23,998
Government securities - 52,132 180,570 239,209 471,911 - 42,790 170,200 198,141 411,131
Loans - 1,302 2,679 6,484 10,465 - 1,175 1,927 5,818 8,920
Leases - 627 2,089 11,070 13,786 - 584 1,859 10,531 12,974
Other interest bearing liabilities 7 5,016 1,001 7,066 13,090 5 8,318 748 6,749 15,820
Australian currency on issue - - - 65,481 65,481 - - - 60,778 60,778
Total financial liabilities 11,834 85,686 188,465 329,832 615,817 13,528 74,833 176,581 282,471 547,413
General Government
151
Suppliers 107 4,492 53 2 4,654 53 3,975 124 2 4,154

Subsidies payable - 171 - - 171 - 430 - - 430
Grants liability 17 2,471 930 275 3,693 21 2,509 982 394 3,906
Other payables 140 1,553 124 29 1,846 327 1,165 71 32 1,595
Deposits 218 - - - 218 211 - - - 211
Government securities - 56,957 181,131 240,027 478,115 - 46,483 170,742 198,890 416,115

Loans - 175 566 5,228 5,969 - 24 157 3,779 3,960
Leases - 180 767 2,278 3,225 - 190 665 2,337 3,192
Other interest bearing liabilities 7 944 3 5,634 6,588 5 811 11 5,055 5,882
Australian currency on issue - - - - - - - - - -
Total financial liabilities 489 66,943 183,574 253,473 504,479 617 55,587 172,752 210,489 439,445
(a) The amounts disclosed in the tables above are the undiscounted values and may not align to the amounts disclosed in the balance sheet.
(b) The Future Fund has entered into forward exchange contracts to manage exposure to currency risk. These contracts are settled on a gross basis with maturities
one year or less. Inflows under contract at 30 June 2015 amounted to $35,564 million (2014: $17,868 million) and outflows amounted to $32,083 million (2014:
$18,163 million). In 2014, the Fund also had contracts in place with maturities greater than 1 year, the values of which were not material to the financial statements.
(c) Includes certain instruments with no specified maturity, such as Australian currency on issue.
(d) The comparatives have been restated to ensure consistency with the current year disclosure. Prior to 2014-15, the above table displayed the discounted value of
the contractual maturities of government securities. These are now shown using the undiscounted value.
Note 12C: Defined benefit superannuation plans
Accounting policy
The Australian Government recognises actuarial gains or losses immediately in Other
Comprehensive Income in the year in which they occur. Interest on the net defined
benefit liability is recognised in profit and loss; the return on plan assets excluding the
amount included in interest income is recognised in Other Comprehensive Income.
Overview of schemes
GGS employees will usually be members of the Commonwealth Superannuation
Scheme (CSS), Public Sector Superannuation Scheme (PSS) or the Public Sector
Superannuation Accumulation Plan (PSSAP). The PSS and the CSS are closed to new
members, with the PSSAP available to most new employees who commenced
employment on or after 1 July 2005. The CSS and PSS provide defined benefits. The
PSSAP provides fully funded accumulation benefits to members, with no ongoing
liability to the Australian Government.
Australian Government military personnel are members of the Defence Force

Retirement and Death Benefits Scheme (DFRDB) or the Military Superannuation
Benefits Scheme (MSBS). Both schemes are defined benefit schemes. The DFRDB
closed to new members in 1991. The MSBS will close to new members from
1 July 2016. A new accumulation scheme, ADF Super, will commence for new military
personnel that enter on or after this date.
The Parliamentary Contributory Superannuation Scheme (PCSS) was closed to new

members from 9 October 2004 and superannuation accumulation arrangements were
established for parliamentarians joining Parliament on or after that date. The
accumulation arrangements were established under the Parliamentary Superannuation
Act 2004 and involve a Government contribution of 15.4 per cent which is calculated
on total parliamentary salaries. The Government contribution is payable into a
superannuation fund chosen by the parliamentarian.
In addition to the above, several schemes have been established under legislation for
specified personnel, including the Judges Pension Scheme (JPS), Governor General
Pension Scheme, Federal Circuit Court Judges Death and Disability Scheme
(FCCJDDS) and the North American and London, Dublin and New Delhi pension
schemes.
152
Several Public Corporations are responsible for defined benefit schemes for their
employees, including:
Scheme title Responsible entities

AvSuper(a) Airservices Australia
Australia Post Superannuation Scheme (APSS)(a) Australia Post Corporation
State Authorities Superannuation Scheme (SASS), State Australian Rail Track Corporation
Superannuation Scheme (SSS), State Authorities Non-contributory
Superannuation Scheme (SASCS)(a)
Australian Submarine Corporation Superannuation Fund (ASCSF) Australian Submarine Corporation
Reserve Bank of Australia Officers Superannuation Fund (OSF) RBA
and UK Pension Scheme (UKPS)(a)
(a) As required under AASB 119, Employee Benefits, the rate used to discount the superannuation liability
is determined by reference to market yields on government bonds. Certain for-profit public corporations
have applied the market yield on high quality corporate bonds in discounting their long-term employee
benefits. On consolidation into these statements, the discount rate and associated disclosures have
been adjusted back to apply government bond rates.
For the purposes of this whole of government disclosure, these less material schemes
have been grouped under other.
Composition
As at 30 June 2015, the composition of the Australian Governments net liability for the
defined benefit schemes (as reported in Note 8F) was as follows:
Scheme General Government Australian Government

2015 2014 2015 2014
$m $m $m $m
Commonwealth Superannuation Scheme (CSS) 76,798 71,556 76,798 71,556
Public Sector Superannuation Scheme (PSS) 74,800 64,862 74,800 64,862
Parliamentary Contributory Superannuation
Scheme (PCSS) 1,057 1,076 1,057 1,076
Defence Force Retirement and Death Benefits
Scheme (DFRDB) 42,945 41,279 42,945 41,279
Military Superannuation Benefits Scheme (MSBS) 51,156 41,598 51,156 41,598
Other schemes 1,298 1,227 1,326 1,351
Other superannuation liabilities 155 149 457 226
248,209 221,747 248,540 221,948
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The following chart illustrates the relative mix of the Australian Government
superannuation liability by scheme:
PSS
30.1%
PCSS
0.4%
DFRDB
17.3%
CSS
30.9%
Other MSBS
0.7% 20.6%
The defined benefit plan asset of $266 million reported in Note 7B (2014: $81 million)
relates to certain of the schemes sponsored by public corporations (included in other).
Regulatory framework
The following table details the enabling legislation for each of the individually
disclosed defined benefits schemes and whether the scheme must comply with the
requirements of the Superannuation Industry (Supervision) Act 1993.
Scheme Enabling Act Period open for new Requirement

members
CSS Superannuation Act 1976 1 July 1976 to Compliance with the
30 June 1990 Superannuation
PSS Superannuation Act 1990 1 July 1990 to Industry (Supervision)
30 June 2005 Act 1993.
MSBS Military Superannuation and From 1 October 1991
Benefits Act 1991
PCSS Parliamentary Contributory Up to 8 October 2004 Exempt from
Superannuation Act 1948 Superannuation
DFRDB Defence Force Retirement 1 October 1972 to Industry (Supervision)
and Death Benefits Act 1973 30 September 1991 Act 1993.
154
Funding arrangements
The funding arrangements for the various schemes are as follows:
Scheme Funding
CSS Partially funded. Contributions generally comprise basic member contributions
PSS and employer productivity (up to three per cent) contributions. Benefits are funded
on an emerging cost basis.
MSBS
PCSS Unfunded. Members contributions are a fixed percentage of: parliamentary
allowance; salary for Ministers of State; and allowance by way of salary for office
holders, which is paid into consolidated revenue. Benefits are funded on an
emerging cost basis.
DFRDB Unfunded. DFRDBs members contribution rate is 5.5% of the highest
incremental salary for rank plus Service Allowance, which is paid into
consolidated revenue. Benefits are funded on an emerging cost basis.
The remaining schemes are a combination of unfunded, partially funded and funded
defined benefit schemes.
Entitlements
The nature of the benefits provided under the schemes are as follows:
Scheme Benefits paid

CSS Employer financed indexed pension defined by a set formula based on the
members age at retirement, years of contributory service and final
superannuation salary. Indexation occurs twice yearly (January and July) in
line with changes in the CPI.
Members basic contributions, employer productivity contributions and interest
can be taken as a lump sum or an additional non-indexed lifetime pension.
This benefit is determined by the value of contributions and investment
returns.
Members who resign before age 55 can claim a preserved resignation benefit
on or after reaching that age. In this case, the indexed pension is calculated by
applying age-based factors to the amount of two and a half times the
members accumulated basic member contributions and interest.
PSS On retirement a lump sum benefit is payable based on the members length of
contributory membership, their rate of member contributions and final average
salary (average of a members superannuation salary on their last three
birthdays).
Members can convert 50 per cent or more of their lump sum to a lifetime
indexed pension based on the members age, indexed twice yearly
(January and July) in line with changes in the CPI.
Where a member resigns before age 55, generally the members lump sum
benefit at that time is crystallised with the funded component of the benefit
accumulating with interest and the unfunded component accumulating with
changes in the CPI, until the benefit becomes payable.
155
Scheme Benefits paid

MSBS Benefits payable comprise a lump sum of accumulated member contributions
and an employer financed defined benefit.
The defined benefit is calculated on the basis of the members final average
salary and length of contributory service.
Benefits arising from members contributions, the employer three per cent
productivity contribution and amounts notionally carried over from the DFRDB
are determined by the value of contributions and investment returns.
May be taken as a lump sum or as a pension or as a combination of lump sum
and pension.
PCSS Lifetime pension or lump sum depending on length of service and additional
offices held.
Where a retiring member has sufficient parliamentary service to meet the
pension qualification period for a lifetime pension (which is payable as set out
in the Act), pension benefits are expressed as a percentage of the
superannuation salary applicable for the PCSS and are indexed by
movements in that superannuation salary.
A PCSS member who qualifies for a pension can also elect to convert up to
half of their benefit to a lump sum. Lump sum benefits are payable to PCSS
members who do not have sufficient parliamentary service to qualify for a
lifetime pension.
DFRDB Length of service is the primary factor that determines benefit entitlement.
Members who retire from the Australian Defence Force (Defence) after
20 years of effective service (or after 15 years of service at retirement age for
rank) are entitled to a pension based on a percentage of their annual pay on
retirement.
Members who have less than 20 years of service but have not reached their
compulsory retiring age for rank are entitled to a refund of their contributions, a
Superannuation Guarantee amount and a productivity benefit; and if
applicable, a gratuity based on completed years of service.
Members are entitled to a productivity benefit under the Defence Force
(Superannuation) (Productivity Benefit) Determination 1988 (issued under the
Defence Act 1903). The amount of this productivity benefit varies according to
the circumstances under which an individual member has left Defence. It is
paid at the same time as DFRDB Scheme benefits are paid.
Generally, benefits may also be payable to any surviving eligible spouse and children
on the death of a member or pensioner.
156
Governance
Commonwealth Superannuation Corporation (CSC), was established under the
Governance of Australian Government Superannuation Schemes Act 2011 and is the trustee
for nine schemes, including the CSS, PSS, DFRDB and MSBS. CSC is responsible for:
administration of each Scheme;
management and investment of Scheme assets;
compliance with superannuation and taxation laws and other applicable laws;
and
compliance with relevant legislation including the Governance of Australian

Government Schemes Act 2011.
CSC is supported by an administrator, a custodian and other specialist providers.
The trustee for the PCSS is established by the enabling Act and comprises five trustees,
being two Senators, two members of the House of Representatives and the Finance
Minister. The Department of Finance acts as adviser to the Trust. The Finance
Secretary also has certain powers under the Act in relation to administration of the
PCSS.
The governance arrangements for the other defined benefit superannuation schemes
are detailed in the annual reports of the respective employing entities.
Risks
The Australian Government is exposed to risks such as interest rate risk, investment
risk, longevity risk and salary risk. The following pages identify and explain the
amounts reported in these financial statements and detail the principal actuarial
assumptions underpinning each of the major schemes, including an analysis of the
sensitivity of changes in these assumptions to the amounts reported in the financial
statements.
157
Reconciliation of the present value of the defined benefit obligation

The reconciliation of the changes in the present value of defined benefit obligation is as follows:
Scheme CSS PSS PCSS DFRDB MSBS Other
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m $m $m
Present value of defined benefit
obligations at beginning of the year (75,322) (72,738) (80,213) (67,777) (1,076) (1,060) (41,279) (32,399) (47,362) (40,665) (10,247) (9,803)
Current service cost (233) (264) (2,761) (2,385) (8) (12) (166) (148) (2,391) (2,155) (311) (375)
Productivity contributions (20) (26) (196) (210) - - - - - - - -
Obligation required - - - - - - - - - - - -
Interest cost (3,005) (3,045) (3,255) (2,888) (43) (45) (1,664) (1,366) (1,985) (1,790) (372) (381)
Contributions by scheme participants (70) (75) (548) (575) - - - - (274) (257) (134) (122)
Actuarial gains/(losses) arising from
changes in demographic assumptions (1,849) - (765) (3,560) (16) - - - - - (16) (2)
changes in financial assumptions (3,401) (1,704) (5,289) (3,135) 7 (32) (2,537) (81) (4,614) (810) (388) (27)
158

liability experience (426) (1,315) (26) (965) 39 28 1,131 (957) (1,913) (2,181) 53 12
other assumptions - - - - - - - - - - (118) (64)
Benefits paid(a) 4,034 3,841 1,633 1,250 40 45 1,570 1,525 585 496 649 513
Taxes, premiums and expenses paid 4 4 37 32 - - - - - - - -
Past service cost - - - - - - - (7,797) - - 91 5
Other - - - - - - - (56) - - - -
Exchange rate gains/(losses) - - - - - - - - - - (17) (2)
Present value of defined benefit
obligations at end of the year (80,289) (75,322) (91,383) (80,213) (1,057) (1,076) (42,945) (41,279) (57,954) (47,362) (10,810) (10,246)
(a) Benefits paid includes estimate of net benefits paid and productivity payments.
Reconciliation of the fair value of scheme assets
The reconciliation of the changes in the fair value of scheme assets is as follows:
Scheme CSS PSS PCSS DFRDB MSBS Other(b)
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m $m $m
Fair value of scheme assets at
beginning of the year 3,765 3,895 15,351 13,856 - - - - 5,764 4,888 8,890 8,271
Interest income 142 156 617 594 - - - - 243 217 317 310
Actual return on scheme assets less
interest income 202 230 1,231 972 - - - - 485 353 536 453
Actuarial gains/(losses) - - - - - - - - - - 2 2
- - - - - - - - - - - -
Net appropriation from CRF 3,329 3,229 310 426 40 45 1,570 1,525 617 545 44 45
Employer contributions
productivity contribution 20 26 196 210 - - - - 274 257 220 212
Contributions by scheme
participants 70 75 548 575 - - - - - - 134 122
159
Foreign currency exchange rate changes

- - - - - - - - - - 7 5
7,528 7,611 18,253 16,633 40 45 1,570 1,525 7,383 6,260 10,150 9,419
Less
Benefits paid(a) 4,034 3,841 1,633 1,250 40 45 1,570 1,525 585 496 649 514
Taxes, premiums and

expenses paid 4 4 37 32 - - - - - - 13 13
4,037 3,845 1,670 1,282 40 45 1,570 1,525 585 496 662 527
Fair value of scheme assets
at end of the year 3,490 3,765 16,583 15,351 - - - - 6,798 5,764 9,488 8,892
(a) Benefits paid includes estimate of net benefits paid and productivity payments.
(b) For schemes categorised under other, the Judges Pension Scheme had a net obligation of $1,205 million at 30 June 2015 (2014: $1,149 million), and the RBA
Officers fund had a net obligation of $305 million (2014: $197 million). The Australia Post Superannuation Scheme reported a net asset position of $266 million
(2014: $48 million) while the balances of the remaining schemes are immaterial to the CFS.
Composition of scheme assets

The fair value of scheme assets is represented by the following:
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
Australian equity 25.0% 25.9% 25.0% 25.9% - - - - 21.0% 22.0% 22.5% 14.6%
Market neutral hedge funds 10.0% 9.6% 10.0% 9.6% - - - - - - 0.0% -
Long short equities - - - - - - - - - - 0.0% -
International equity 31.0% 29.5% 31.0% 29.5% - - - - 25.0% 23.0% 1.9% 1.2%
Fixed income - - - - - - - - - - 1.5% 1.5%
Property 12.0% 12.0% 12.0% 12.0% - - - - 12.0% 12.0% 10.0% 15.2%
Private equity - - - - - - - - 8.0% 9.0% 6.4% 8.1%
Credit 7.0% 6.6% 7.0% 6.6% - - - - - - - -
Debt instruments - - - - - - - - - - 15.1% 14.4%
International bonds 5.0% 5.1% 5.0% 5.1% - - - - - - 0.1% -
Diversfied growth funds - - - - - - - - - - 0.3% 0.3%
Other 5.0% 5.2% 5.0% 5.2% - - - - 17.0% 16.0% 26.5% 27.9%
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Cash 5.0% 6.1% 5.0% 6.1% - - - - 17.0% 18.0% 15.7% 16.8%
Total expense recognised

The amount recognised in the statement of comprehensive income for the year ended 30 June is as follows:
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m $m $m
Current service cost 233 264 2,761 2,385 8 12 166 148 2,391 2,155 311 375
Net Interest 2,864 2,889 2,638 2,293 43 45 1,664 1,366 1,742 1,573 55 71
Past service cost - - - - - - - 7,797 - - (91) (5)
Superannuation expense 3,097 3,153 5,400 4,678 52 56 1,830 9,311 4,133 3,728 275 440
Principal actuarial assumptions
The principal actuarial assumptions at 30 June are as follows:
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
Discount rate (active members) 3.7% 4.1% 3.7% 4.1% 3.7% 4.1% 3.7% 4.1% 3.7% 4.1% 3.6-4.9% 3.5-4.6%
Discount rate (pensioners) 3.7% 4.1% 3.7% 4.1% 3.7% 4.1% - - - - 0 0
Expected rate of return on plan
assets (active members) - - - - - - 3.7% 4.1% 3.7% 4.1% 0.0% 0.0%
Expected salary increase rate (a) 1.5% 4.0% 1.5% 4.0% 1.5% 4.0% 4.0% 4.0% 4.0% 4.0% 1.5-5.0% 2.5-5.0%
Expected pension increase rate (b) 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 1.0-3.0% 1.0-3.0%
(a) For CSS, PSS and PCSS, general salary increases of 1.5%pa apply to June 2018 then 4.0%pa thereafter.
(b) Not relevant for all schemes. See notes below for more information.
For the defined benefit obligation, assumptions have been made regarding rates of retirement, death (for active, preserved and
161
pension members), mortality improvements, invalidity, resignation, retrenchment, retention and take up rates of pensions in the
schemes. Assumptions have also been made for the ages of spouses and rates of member contributions.
Membership data for the CSS, PSS, PCSS, DFRDB and MSBS as at 30 June 2014 was projected forward allowing for assumptions in
accordance with the 2014 Long Term Cost Report. The data was then adjusted for the difference between actual benefit payments and
those based on the assumed decrements. Members account balances were increased to be consistent with the estimated level of

earning rates prevailing at 30 June 2015.
For the fair value of plan assets, assumptions have been made as to the expected rate of return. For certain schemes, the fair value of
scheme assets as at 30 June 2015 was estimated using the audited fair value of scheme assets at 30 June 2014 rolled forward to
30 June 2015 adjusted for cash flows during the year.
Sensitivity analysis for significant actuarial assumptions

The impact of a change in the defined benefit obligation reported as at 30 June 2015
under several scenarios is presented below. The defined benefit obligation has been
recalculated by changing the assumptions as outlined below, whilst retaining all other
assumptions.
Impact on defined benefit obligation

Change in Increase in Decrease in
assumption $m $m
CSS
Discount rate 0.5% (4,662) 5,240
Salary growth rate 0.5% 158 (149)
Rate of CPI increase 0.5% 4,615 (4,212)
PSS
Discount rate 0.5% (8,468) 9,811
Salary growth rate 0.5% 2,452 (2,284)
PCSS
Discount rate 0.5% (77) 87
Salary growth rate 0.5% 84 (76)
Rate of CPI increase 0.5% - -
DFRDB and MSBS
Discount rate 0.5% (9,953) 11,498
Salary growth rate 0.5% 4,730 (4,358)
Other
Discount rate(a) 0.5% (139) 151
Salary growth rate(b) 0.5% 145 (133)
Rate of CPI increase(c) 0.5% 8 (8)
Discount rate(d) 1.0% (239) 276
Salary growth rate(e) 1.0% 225 (196)
Pensioner mortality rate(f) 5.0% (0) 0
Discount rate(g) 0.3% (50) 54
Salary growth rate(h) 0.3% 13 (13)
Pension growth rate(i) 0.3% 38 (36)
(a) Relates to the percentage change in discount rate applied to G-GPS, JPS, FCCJDDS, APSS, ASCSF
and other.
(b) Relates to the percentage change in salary growth rate applied to G-GPS, JPS, FCCJDDS, APSS,
ASCSF, SASS, SSS, SANCS and other.
(c) Relates to the percentage change in CPI rate applied to SASS, SSS, SANCS and other.
(d) Relates to the percentage change in discount rate applied to APSS, SASS, SSS and SANCS.
(e) Relates to the percentage change in salary growth rate applied to APSS.
(f) Relates to the percentage change in pensioner mortality rate applied to SASS, SSS and SANCS.
(g) Relates to the percentage change in discount rate applied to OSF and Other.
(h) Relates to the percentage change in salary growth rate applied to OSF and Other.
(i) Relates to the percentage change in pension growth rate applied to OSF and Other.
162
Employer contributions
The following table shows the expected contributions for 2016 by scheme:
Scheme 2016
$m
Commonwealth Superannuation Scheme 19
Public Sector Superannuation Scheme 187
Parliamentary Contributory Superannuation Scheme 38
Defence Force Retirement and Death Benefits Scheme 110
Military Superannuation Benefits Scheme 1,237
Other schemes 256
Maturity profile of defined benefit obligation

The weighted average duration of the defined benefit obligation in years for each of
the schemes is outlined below.
Weighted average duration

of the defined benefit
Scheme obligation in years
Commonwealth Superannuation Scheme 1976 12.8 years
Commonwealth Superannuation Scheme 1922 7.5 years
Public Sector Superannuation Scheme 21.1 years
Parliamentary Contributory Superannuation Scheme 16 years
Defence Force Retirement and Death Benefits Scheme 17.6 years
Defence Forces Retirement Benefits Scheme 9.4 years
Military Superannuation Benefits Scheme 27.5 years
Other
AvSuper 10 years
Australia Post Superannuation Scheme 9 years
State Authorities Superannuation Scheme 12.2 years
State Superannuation Scheme 12.2 years
State Authorities Non contributory Superannuation Scheme 12.2 years
Australian Submarine Corporation Superannuation Fund 8 years
North American and London, Dublin and New Delhi pension schemes 10.5 years
Reserve Bank of Australia Officers' Superannuation Fund 18 years
UK Pension Scheme 15.2 years
Judges' Pension Scheme 14.7 years
Governor General Pension Scheme 10.1 years
Federal Circuit Court Judges Death and Disability Scheme 2.8 years
163
Note 13: Events occurring after balance date

In accordance with AASB 110 Events after the Reporting Period, reporting entities are
required to disclose any event between the balance sheet date and the date the
financial statements are authorised for issue that may affect the financial statements.
The standard classifies these events as either adjusting or non-adjusting.
There have been no significant events occurring after reporting date that require the
CFS to be adjusted as at 30 June 2015, nor have there been significant non-adjusting
events that have occurred after reporting date.
Note 14: Reconciliations and explanations

Prepared in accordance with AASB 1049, the whole of government and GGS financial
statements provide users with information about the financial position, performance
and cash flows of the Australian Government and its sectors; and information that
facilitates assessments of the macro-economic impact of the Australian Government
and its sectors.
Reporting at the whole of government and sector level is also distinguished by the
following two characteristics:
The application of two international reporting frameworks, being the accounting

standards issued by the International Accounting Standards Board (through the
AASB), and the system of GFS issued by the IMF and, in Australia, administered
by the ABS; and
The public release of budget information for the GGS.
To assist the differing users of these whole of government accounts, AASB 1049
requires the following reconciliations and explanations:
Reconciliation to ABS GFS measures (refer Note 14A) which compares the key
financial measures contained in this financial report to the corresponding
measures under the ABS GFS Manual and highlights the remaining differences
between the two reporting frameworks;
Reconciliation to original budget (refer Note 14B) which compares the reported
results to the original budget for 2014-15 as outlined in May 2014 with
explanations for key movements; and
Glossary of key fiscal aggregates (refer Note 14C) which explains the key
technical terms reported in the CFS and which are not common to financial
reports prepared by other entities.
164
Note 14A: Reconciliations to ABS GFS measures
The following tables provide a reconciliation of key fiscal aggregates on the face of the financial statements where the amounts
reported differ from the corresponding key fiscal aggregates measured under the ABS GFS manual as at 1 July 2013(a).
(a) Reconciliation to GFS net operating balance
Government corporations corporations netting Government
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m
Net result from transactions - net
operating balance reported in
Statement of Comprehensive Income (37,415) (40,587) (1,788) (1,398) 957 9,456 (2,575) (1,730) (40,821) (34,259)
Convergence differences:
Unwinding of concessional interest costs(b) (47) (146) - - - - - - (47) (146)
Concessional interest costs(b) 860 1,061 - - - - - - 860 1,061
Seigniorage(c) (111) (112) - - - - - - (111) (112)
Defence weapons platforms and inventory(d)
Under ABS GFS Manual applicable to 2013-14 - (1,712) - - - - - - - (1,712)
165
Under ABS GFS Manual applicable to 2014-15 162 - - - - - - - 162 -

Movement in deferred tax assets and deferred - -
tax liabilities - - 111 8 8 1 (119) (9) - -
Issue and surrender of free carbon permits(e) - - - - - - - - - -
Capital grant to the RBA(e) - 8,800 - - - (8,800) - - - -
Dividends to GGS from other sectors(f) - - (110) (222) (2,198) (1,319) 2,308 1,541 - -

Total convergence differences 864 7,891 1 (214) (2,190) (10,118) 2,189 1,532 864 (909)
GFS Net operating balance (36,551) (32,696) (1,787) (1,612) (1,233) (662) (386) (198) (39,957) (35,168)
(a) Under AASB 1049, the financial statements are reconciled to the ABS GFS manual effective at the beginning of the comparative reporting period (1 July 2013).The amounts
reported may differ to the aggregates subsequently reported by the ABS in the 2014-15 GFS publication because of changes in methodology, differences in interpretation
and/or updated information availability subsequent to the release of the financial statements.
(b) The financial statements discount concessional loans by a market rate of a similar instrument whereas the ABS GFS manual does not discount as no secondary market is
considered to exist.
(c) The financial statements treat the profit between the cost and sale of circulating coin (seigniorage) as revenue whereas the ABS GFS manual treats circulating coin as a
liability and the cost to produce the coins as an expense.
(d) For 2014-15, this impact reflects the difference between depreciation reported in the financial statements and the consumption of fixed capital reported for statistical purposes.
(e) The 2013-14 financial statements treated a capital payment to the RBA as a capital grant expense for the GGS and revenue for the PFC sector. The ABS GFS manual treats
this as an equity injection which would not appear on the operating statement.
(f) The financial statements treat dividends to the GGS as a distribution to owners whereas the ABS GFS manual treats dividends to owners as an expense.
(b) Reconciliation to GFS total change in net worth

2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m
Total change in net worth before
transactions with owners in their
capacity as owners as reported in
Statement of Comprehensive Income (47,253) (54,423) (2,154) (1,105) 6,153 10,116 (1,296) (9,165) (44,550) (54,577)
Relating to net operating balance 864 7,891 1 (214) (2,190) (10,118) 2,189 1,532 864 (909)
Relating to change in treatment of
defence weapons and inventory (a) 43,760 - - - - - - - 43,760 -
Relating to other economic flows 7,016 (5,213) (2,554) (1,692) (1,965) 1,321 1,806 9,333 4,303 3,749
Relating to transactions with owners - - 4,707 3,011 (1,998) (1,319) (2,709) (1,692) - -
Total convergence differences 51,640 2,678 2,154 1,105 (6,153) (10,116) 1,286 9,173 48,927 2,840
GFS Total change in net worth 4,387 (51,745) - - - - (10) 8 4,377 (51,737)
(a) Consistent with AASB 1049, the Australian Government elected not to apply Chapter 2 Amendments to Defence Weapons Platforms of the ABS publication Amendments to
Australian System of Government Finance Statistics, 2005 (ABS Catalogue No. 5514.0) published on the ABS website on 5 April 2011 until the 2014-15 reporting period.
166
The 2013-14 comparatives are prepared on the previous basis.

(c) Reconciliation to GFS net lending / (borrowing)
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m
Net lending/(borrowing) as reported in
Statement of Comprehensive Income (40,121) (44,437) (4,717) (5,818) 974 8,739 (2,594) (1,778) (46,458) (43,294)
Relating to net operating balance 864 7,891 1 (214) (2,190) (10,118) 2,189 1,532 864 (909)
Defence weapons and inventory
- net acquisition(a) - 4,461 - - - - - - - 4,461
Defence weapons and inventory - depreciation
and consumption(a) - (2,749) - - - - - - - (2,749)
Auction sales of spectrum(b) (1,965) - - - - - - - (1,965) -
Total convergence differences (1,101) 9,603 1 (214) (2,190) (10,118) 2,189 1,532 (1,101) 803
GFS Net lending/(borrowing) (41,222) (34,834) (4,716) (6,032) (1,216) (1,379) (405) (246) (47,559) (42,491)
(a) The 2013-14 comparatives show acquisitions of defence weapons platforms and inventory as an expense.
(b) The financial statements recognise the disposal of spectrum licences at the point of issue whereas the ABS GFS manual recognises spectrum licences at the time of auction
and the proceeds from their sale at the point of auction, reflected on the balance sheet as a receivable.
167

(d) Reconciliation to GFS net worth

2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$m $m $m $m $m $m $m $m $m $m
Net worth as reported in Balance Sheet (308,454) (261,513) 14,846 12,293 24,802 20,651 (40,159) (36,166) (308,965) (264,735)
Provision for doubtful debts(a) 25,076 25,761 15 13 1 8 - - 25,092 25,782
Concessionality on loans and investments(b) 9,435 8,688 - - - - - - 9,435 8,688
Investment in other sector entities(c) (707) (3,445) - - - - 707 3,445 - -
Deferred tax assets(d) - - (909) (909) (4) (12) 913 921 - -
Defence weapons platforms and inventory(e)
Under ABS GFS Manual applicable to 2013-14 - (43,760) - - - - - - - (43,760)
Under ABS GFS Manual applicable to 2014-15 6,844 - - - - - - - 6,844 -
Dividend payable - - - - - - - - - -
Special drawing rights (SDR) - - - - - - - - - -
Seigniorage(f) (3,861) (3,750) - - - - - - (3,861) (3,750)
Deferred tax liability(d) - - 648 537 - - (648) (537) - -
Auction sales of spectrum(g) - 1,965 - - - - - - - 1,965
Shares and other contributed capital(h) - - (14,600) (11,934) (24,799) (20,647) 39,187 32,337 (212) (244)
168
Minority interests - - - - - - - - - -
Total convergence differences 36,786 (14,542) (14,846) (12,293) (24,802) (20,651) 40,159 36,166 37,297 (11,320)
GFS Net worth (271,668) (276,055) - - - - - - (271,668) (276,055)
(a) The financial statements treat provisions for doubtful debts as an offset to the asset in the balance sheet. The ABS GFS manual does not consider the creation of a provision
to be an economic event and therefore excludes it from the balance sheet.
(b) The financial statements discount concessional loans by a market rate of a similar instrument whereas the ABS GFS manual does not discount as no secondary market is
considered to exist.
(c) The financial statements apply AASB 13 to the valuation of the GGSs investment in public corporations whereas the ABS GFS manual values public corporations at their net
assets unless the shares in a public corporation are publicly traded. A convergence difference arises where the application of AASB 13 results in a valuation other than net
assets.
(d) Deferred tax assets and deferred tax liabilities are reported in the financial statements whereas the ABS GFS manual does not recognise these items.
(e) Consistent with AASB 1049, the Australian Government elected not to apply Chapter 2 Amendments to Defence Weapons Platforms of the ABS publication Amendments to
Australian System of Government Finance Statistics, 2005 (ABS Catalogue No. 5514.0) published on the ABS website on 5 April 2011 until the 2014-15 reporting period.
The ABS GFS Manual recognises defence weapons platforms and inventory as assets at market value. Prior to the 2011 amendment, acquisitions of defence weapons
platforms were treated as an expense at the time of acquisition. The 2014-15 impact reflects the difference between the carrying value reported in the financial statements at
cost (as detailed in Note 1) and the market value calculated by the ABS for statistical purposes. The amount reported may differ to the value subsequently reported by the ABS
in the 2014-15 GFS publication because of revisions made as new information becomes available.
(f) The financial statements treat the profit between the cost and sale of circulating coin (seigniorage) as revenue whereas the ABS GFS manual treats circulating coin as a
liability and the cost to produce the coins as an expense.
(g) The financial statements recognise the disposal of spectrum licences at the point of issue whereas the ABS GFS manual recognises spectrum licences at the time of auction
and the proceeds from their sale at the point of auction, reflected on the balance sheet as a receivable.
(h) The financial statements treat shares and other contributed capital in public corporations as part of net worth whereas the ABS GFS manual deducts shares and other
contributed capital in the calculation of net worth (with net worth calculated as assets less liabilities less shares and other contributed equity).
The ABS GFS manual measures inventory at market value (rather than the lower of
cost and net realisable value). It also does not recognise the provision for
decommissioning/restoration costs. The above reconciliation has not been adjusted for
these items on the basis of materiality and information availability.
Reconciliation to GFS cash surplus/(deficit) is disclosed on the face of the cash flow
statement.
Note 14B: Reconciliation to original budget

The following tables provide a comparison of the original 2014-15 Budget to the final
actual results for the GGS. Explanations are provided for major variances, which are
typically those amounts greater than $1 billion.
The Australian Government does not present budgets at the whole of government
level, and therefore, only the GGS is presented in this note. The Budget is not audited.
169
General government sector operating statement 2014-15

2015 Original Budget Revised
Actual budget(a) variance budget(b)
$m $m $m $m
Taxation revenue 355,009 368,814 (13,805) 359,117
Sales of goods and services 8,975 8,928 47 9,277
Interest income 3,145 4,229 (1,084) 3,653
Dividend income 6,178 2,570 3,608 4,796
Other 7,006 6,807 199 7,255
Total revenue 380,313 391,348 (11,035) 384,098
Wages and salaries 18,357 19,638 (1,281) 18,939
Superannuation 6,927 4,291 2,636 6,803
Depreciation and amortisation 6,804 6,644 160 6,804
Supply of goods and services 79,289 79,875 (586) 80,474
Other operating expenses 5,742 6,111 (369) 5,502
Total gross operating expenses 117,119 116,559 560 118,522
Superannuation interest expense 8,999 9,275 (276) 8,989
Interest expenses 16,024 15,551 473 15,915
Current transfers
Current grants 124,635 124,121 514 124,435
Subsidy expenses 12,506 12,184 322 12,522
Personal benefits 129,190 126,336 2,854 130,663
Total current transfers 266,331 262,641 3,690 267,620
Capital transfers
Mutually agreed write-downs 1,857 2,662 (805) 2,124
Other capital grants 7,398 8,156 (758) 7,164
Total capital transfers 9,255 10,818 (1,563) 9,288
Total expenses 417,728 414,845 2,884 420,335
Other economic flows included in operating result
Net write-downs of assets (5,412) (7,037) 1,625 (6,878)
Assets recognised for the first time 326 346 (20) 319
Net gain/(loss) from the sale of assets 10,690 - 10,690 -
Net foreign exchange gains (2,335) 63 (2,398) (247)
Net swap interest gains/(losses) (977) - (977) (799)
Other gains/(losses) 4,648 6,630 (1,982) 6,306
Net result from associates and joint ventures 27 - 27 -
Total Other economic flows 6,967 1 6,966 (1,300)
Operating Result from continuing operations (30,448) (23,495) (6,953) (37,537)
Discontinued operation - - - -
Operating Result (30,448) (23,495) (6,953) (37,537)
Other non-owner movements in equity
Revaluation of equity investments 3,201 (2,237) 5,438 2,681
Revaluation of non-financial assets 1,647 - 1,647 -
Actuarial revaluations of superannuation (17,780) 17 (17,797) (3,383)
Other economic revaluations (3,873) 124 (3,997) (3,554)
Total other economic flows included in equity (16,805) (2,096) (14,709) (4,256)
net worth (47,253) (25,591) (21,662) (41,793)
Purchases of non-financial assets 11,337 10,679 658 11,622
less Sales of non-financial assets 2,423 2,370 53 2,348
less Depreciation 6,804 6,644 160 6,804
plus Change in inventories 582 492 90 494
plus Other movements in non-financial assets 14 201 (187) 174
Total net acquisition of non-financial assets 2,706 2,359 347 3,138
Fiscal balance (net lending/borrowing) (40,121) (25,855) (14,266) (39,375)
(a) Original budget for 2014-15 as presented in the 2014-15 Budget papers released in May 2014.
(b) Revised budget for 2014-15 as presented in the 2015-16 Budget papers released in May 2015.
170
Fiscal balance
The fiscal balance for the 2014-15 financial year was a deficit of $40.1 billion,
representing a movement of $14.3 billion on the original budget deficit of $25.9 billion.
Revenue
Total revenue for 2014-15 was $380.3 billion, $11.0 billion (2.8 per cent) lower than the
original budget of $391.3 billion.
Total taxation revenue was $355.0 billion, $13.8 billion lower than the original budget
of $368.8 billion. Key drivers included:
lower company tax of $7.3 billion, reflecting weaker than expected growth in
corporate profitability and commodity prices;
lower excise duty of $2.8 billion, partially offset by higher customs duty of
$1.6 billion due to:
faster than expected movement of tobacco products offshore, primarily as a
result of a major tobacco manufacturer shifting production overseas;
lower petrol prices and weaker than expected demand for diesel; and
an increase in import volumes for textiles, clothing and footwear and higher
demand for imported building related materials impacting customs duty only.
lower individuals and other withholding taxes of $2.4 billion, consistent with
weaker than expected growth in wages and salaries; and
lower superannuation fund tax of $2.0 billion, consistent with lower than expected
taxable contributions and earnings.
Total non-taxation revenue was $25.3 billion, $2.8 billion higher than the original
budget of $22.5 billion. Higher dividend income ($3.6 billion) was the key driver for
this movement, primarily due to the higher than expected RBA dividend accrued in
2014-15. This was attributable to changes in exchange rates for the year, which resulted
in higher earnings for the RBA. The investment portfolio held by the Future Fund 1 for
2014-15 returned higher dividends of $1.7 billion and lower interest income of
$0.7 billion compared to the Budget.
Expenses
Total expenses for 2014-15 were $417.7 billion, $2.9 billion (0.7 per cent) higher than the
original budget of $414.8 billion.
1 It is difficult to accurately predict the financial outcome of the investment activities

undertaken by the Future Fund due to the volatile nature of investment markets. Further
information on variances relating to Future Fund activities can be found in the Future Funds
2014-15 financial statements available at: www.futurefund.gov.au/annual_reports.
171
Total gross operating expenses were $117.1 billion, $0.5 billion higher than the original
budget of $116.6 billion. Key drivers included:
higher superannuation expense of $2.6 billion, mainly due to the different interest
rates used in calculating the budget and actuals figures for civilian schemes and an
actuarial change to the pension indexation rate from 2.5 per cent to 4 per cent in
2013-14 for military schemes; and
lower wages and salaries expense of $1.3 billion, in relation to a number of entities,
with the largest movements relating to Defence due to lower staff numbers and the
Australian Taxation Office (ATO) staffing reductions.
Total current and capital transfers were $275.6 billion, $2.1 billion higher than the
original budget of $273.5 billion. Key drivers included:
higher personal benefit expenses of $2.9 billion, mainly relating to:
higher childcare benefit and rebate expenditure ($1.7 billion), reflecting a greater
than expected number of people utilising child care services, both in terms of
children in childcare and hours claimed, as well as higher than expected fees;
higher Family Tax Benefit expenditure ($1.6 billion), as a result of lower than
expected wage growth, which drove up average payment rates and recipient
numbers, and delays in the passage of legislation for the A New Tax System
(Family Assistance)(Administration) Act 1999; and
lower paid parental leave expenditure ($1.2 billion), as a result of the
Governments decision in the 2015-16 budget not to proceed with the scheme.
lower mutually agreed write-downs of $0.8 billion, primarily as a result of a
number of corporate groups entering into settlement agreements with the ATO,
reducing the bad and doubtful debt provision.
Other economic flows

Net losses from other economic flows included in operating result and equity were
$9.8 billion, $7.7 billion higher than the original budget net loss of $2.1 billion. Key
drivers included:
lower revaluation of superannuation liabilities of $17.8 billion, primarily as a result
of the change in the discount rate which is tied to the government bond rate (the
budget does not estimate changes in discount rates in the estimation of the
superannuation liability);
net gains from the sale of assets of $10.7 billion, primarily attributable to the Future
Fund gain on the sale of investments ($6.9 billion) and the gain from the sale of
Medibank ($1.6 billion) not included in the original budget;
higher net market revaluation losses of debt of $7.9 billion, primarily due to much
lower interest rates at the end of the year than at original budget;
172
higher revaluation of equity of $5.4 billion relating to investments in controlled

entities and companies such as the RBA, Clean Energy Finance Corporation and
Australian Reinsurance Pool Corporation for which revaluations are not included
in the original budget;
lower other economic revaluations of $4.0 billion relating to forecasts included in

the original budget that did not occur;
net foreign exchange losses of $2.4 billion primarily relating to the investment
portfolio held by the Future Fund for which gains/(losses) are not included in the
original budget; and
other gains/losses of $2.0 billion, primarily attributable to the $1.2 billion

write-back to the Higher Education Superannuation programme liability following
agreement with the NSW Government that NSW will resume making payments to
NSW universities superannuation expenses to meet its share.
173
General government sector balance sheet as at 30 June 2015

$m $m $m $m
Assets
Financial assets
Cash and deposits 3,156 2,480 676 3,144
Advances paid 40,658 45,145 (4,487) 45,874
Other receivables 42,335 43,080 (745) 41,765
Investments, loans and placements 136,376 128,753 7,623 131,157
Equity investments 83,496 75,524 7,972 84,882
Total financial assets 306,021 294,983 11,038 306,821
Land 9,941 8,875 1,066 9,287
Buildings 25,639 25,425 214 26,043
Plant, equipment and infrastructure 56,276 57,347 (1,071) 57,012
Intangibles 6,544 5,988 556 6,312
Investment property 187 211 (24) 195
Inventories 8,415 7,987 428 8,360
Heritage and cultural assets 11,332 10,588 744 10,843
Other non-financial assets 4,896 3,217 1,679 3,794
Total non-financial assets 123,230 119,638 3,592 121,847
Total assets 429,251 414,620 14,631 428,668
Liabilities
Deposits held 218 182 36 211
Government securities 409,937 387,772 22,165 418,307
Loans and other interest bearing liabilities 12,408 13,436 (1,028) 10,347
Other borrowing 1,509 1,376 133 1,545
Total interest bearing liabilities 424,072 402,766 21,306 430,409
Superannuation liability 248,209 163,228 84,981 167,327
Other employee liabilities 17,052 15,291 1,761 16,030
Suppliers payable 4,601 4,705 (104) 4,956
Personal benefits payable 5,983 3,958 2,025 5,716
Subsidies payable 4,529 3,937 592 4,585
Grants payable 3,239 3,174 65 2,394
Other payables and provisions 30,020 29,572 448 28,562
Total provisions and payables 313,633 223,865 89,768 229,571
Total liabilities 737,705 626,631 111,074 659,979
Net worth (308,454) (212,010) (96,444) (231,311)
174
Net worth
Net worth at 30 June 2015 was negative $308.5 billion, $96.4 billion higher than the
original budget net worth of negative $212.0 billion.
Assets
Total assets at 30 June 2015 were $429.3 billion, $14.6 billion (3.5 per cent) higher than
the original budget of $414.6 billion.
Total financial assets were $306.0 billion, $11.0 billion higher than the original budget
of $295.0 billion. Key drivers included:
higher equity investments of $8.0 billion, due to:
an increase of $6.4 billion in the Treasurys investment in the RBA, the
Australian Reinsurance Pool Corporation and the Clean Energy Finance
Corporation which increased during 2014-15; and
a higher value of equity investments managed by the Future Fund of
$3.3 billion.
higher investments, loans and placements of $7.6 billion, due to:
a higher value of deposits and securities held by the AOFM of $9.2 billion,
primarily due to a more conservative cash management approach in estimating
government expenditures and due to the imprecision in forecasting the highly
volatile daily flows of revenue, expenditure and financing items across the GGS;
a higher value of investments managed by the Future Fund of $6.3 billion;
a lower value of the IMF quota payments of $5.1 billion, relating to the shift of
the IMF quota increase under the 2010 reform from 2014-15 to 2015-16 as a result
of the delay by the United States in implementing these reforms (refer below for
related decrease in liabilities); and
lower other investments of $1.8 billion primarily relating to the sale of
Medibank which was not disclosed in the original budget due to commercial
confidentiality reasons.
lower advances paid of $4.5 billion. This was mainly due to the different
measurement techniques used in the Budget and the CFS for the value of the
advances paid to the International Development Association (IDA) and Asian
Development Fund (ADF). In the budget, IDA/ADF was recorded at nominal value
whilst fair value was used for the CFS (see Note 1.3 and Statement 9 in the 2014-15
Budget Paper No. 1 for more detail).
Total non-financial assets were $123.2 billion, $3.6 billion higher than the original
revaluation of non-financial assets ($1.6 billion), as the budget does not include
estimates for these revaluations; and
175
higher other non-financial assets ($1.6 billion), primarily attributable to defence

prepayments for foreign military sales.
Liabilities
Total liabilities at 30 June 2015 were $737.7 billion, $111.1 billion (17.7 per cent) higher
than the original budget of $626.6 billion.
Total provisions and payables were $313.6 billion, $89.8 billion higher than the original
higher Australian Governments superannuation liabilities of $85.0 billion,
primarily due to different discount rates used to value the liability. In the original
budget, a discount rate applied by the actuaries in preparing the Long-term Cost
Report was used to allow comparability between years for budget estimates.
Consistent with the AAS, the long-term government bond rate as at 30 June 2015
was used for the CFS. Additional information on the measurement is provided in
Note 12C and the Statement 7 in the 2014-15 Budget Paper No. 1.
higher personal benefits payable of $2.0 billion. Contributing factors included:

Low Income Earner Superannuation Contribution ($0.9 billion), not being
budgeted for at the beginning of the year (as per the Governments policy
decision at the time); and
Family Tax Benefit ($0.6 billion), which was higher as a result of lower than
expected wage growth, which drove up average payment rates and recipient
numbers.
higher other employee liabilities of $1.8 billion, primarily due to the provision for
military compensation claims. This provision is difficult to estimate due to the
uncertainty surrounding the inputs that determine this long-term liability.
lower other payables and provisions of $0.4 billion, primarily due to two major
offsetting variances:
an increase of $1.2 billion to the provision for the Natural Disaster Relief and
Recovery Arrangements to reflect actual reconstruction costs in Queensland;
and
a decrease of $1.0 billion for a write-back to the Higher Education
Superannuation programme liability (refer Other Economic Flows above).
176
Total interest bearing liabilities were $424.1 billion, $21.3 billion higher than the
original budget of $402.8 billion. Key drivers included:
higher Australian Government Securities (AGS) of $22.2 billion managed by the

AOFM. This was due to a larger financing task as well as lower interest rates and
lower nominal and real issuance yields for the year. 2
lower loans and other interest bearing liabilities of $1.0 billion, mainly due to:
lower Treasury Promissory Notes of $2.8 billion, relating to the shift of the IMF
quota increase under the 2010 reform from 2014-15 to 2015-16 as a result of the
delay by the United States in implementing these reforms (refer above for
related decrease in assets);
higher swap principal payables of $0.9 billion held by the Future Fund; and
higher Treasury Special Drawing Rights of $0.5 billion relating to changes in
exchange rates.
2 The AOFMs projections of AGS are a consequence of the expenditure, investment and revenue decisions
and assumptions made by the Government in producing its original budget. The debt issuance program
was set at $67 billion for the original budget and as at 30 June 2015 the AGS on issue was $7.6 billion
higher than this forecast. Further information can be found in the AOFMs 2014-15 financial statements
available at: http://aofm.gov.au/publications/annual-reports/.
177
General government sector cash flow statement 2014-15

$m $m $m $m
Cash received
Taxes received 351,675 360,372 (8,697) 351,452
Receipts from sales of goods and services 8,839 8,910 (71) 9,218
Interest receipts 3,056 3,657 (601) 3,131
Dividend receipts 4,745 4,257 488 4,121
Other receipts 7,598 6,339 1,259 7,164
Total cash received 375,913 383,534 (7,621) 375,087
Cash used
Payments for employees (25,775) (27,022) 1,247 (26,061)
Payments for goods and services (80,252) (79,807) (445) (80,293)
Grants and subsidies paid (144,512) (147,617) 3,105 (146,048)
Interest paid (13,924) (14,174) 250 (14,037)
Personal benefits (130,891) (127,221) (3,670) (131,520)
Other payments (5,289) (5,890) 601 (5,247)
Total cash used (400,643) (401,730) 1,087 (403,206)
Net cash from discontinued operating activities - - - -
Net cash from/(used by) operating activities (24,730) (18,196) (6,534) (28,119)
Cash flows from investments in
Sales of non-financial assets 2,305 2,244 61 2,222
Purchases of non-financial assets (11,280) (10,753) (527) (11,795)
Net cash flows from investments in
non-financial assets (8,975) (8,509) (466) (9,572)
Cash flows from investments in financial
assets for policy purposes
Net advances repaid/(paid) (5,163) (6,819) 1,656 (5,500)
Net cash flows from investments in financial
assets for policy purposes (5,163) (6,819) 1,656 (5,500)
Cash flows from investments in financial
assets for liquidity purposes
Decrease/(Increase) in investments (11,953) (7,017) (4,936) (9,021)
Net cash flows from investments in financial
assets for liquidity purposes (11,953) (7,017) (4,936) (9,021)
Net cash from discontinued investing activities - - - -
Net cash from/(used by) investing activities (26,091) (22,345) (3,746) (24,093)
Cash flows from financing activities
Cash received
Borrowings 52,381 42,308 10,073 53,695
Other financing - - - 48
Total cash received 52,381 42,308 10,073 53,743
Cash used
Other financing (2,248) (2,289) 41 (2,231)
Total cash used (2,248) (2,289) 41 (2,231)
Net cash from discontinued financing activities - - - -
Net cash flows from financing activities 50,133 40,018 10,115 51,512
Net (decrease)/increase in cash held (688) (523) (165) (701)
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General government sector cash flow statement 2014-15 (continued)

$m $m $m $m
Cash at beginning of year 3,844 (47) 3,891 3,844
Cash at end of year 3,156 (570) 3,726 3,144
Net cash flows from operating activities (24,730) (18,196) (6,534) (28,119)
Net cash flows from investments in
non-financial assets (8,975) (8,509) (466) (9,572)
Cash surplus/(deficit) (33,705) (26,705) (7,000) (37,691)
Finance leases and similar arrangements (72) - (72) -
GFS cash surplus/(deficit) (33,777) (26,705) (7,072) (37,691)
The 2014-15 GFS cash deficit for the Australian Government was $33.8 billion, a
movement of $7.1 billion compared to the original budget deficit of $26.7 billion.
The variances for the cash flow statement reflect the movements in the operating
statement and balance sheet.
Note 14C: Glossary of key fiscal aggregates

Key technical terms
Balance sheet
The balance sheet shows stocks of assets, liabilities and net worth. In accordance with
the Accrual Uniform Presentation Framework, net debt, net financial worth and net
financial liabilities are also reported in the balance sheet.
Comprehensive result (total change in net worth before transactions with owners as
owners)
The net result of all items of income and expense recognised for the period. It is the
aggregate of operating result and other movements in equity, other than transactions
with owners as owners.
Fiscal balance
The fiscal balance (or net lending/borrowing) is the net operating balance less net
capital investment. Thus, the fiscal balance includes the impact of net expenditure
(effectively purchases less sales) on non-financial assets rather than consumption
(depreciation) of non-financial assets.
The fiscal balance measures the Australian Governments investment-saving balance.

It measures in accrual terms the gap between government savings plus net capital
transfers, and investment in non-financial assets. As such, it approximates the
contribution of the GGS to the balance on the current account in the balance of
payments.
179
Mutually agreed bad debts

Financial assets written off where there was prior knowledge and consent by the
counterparties.
Net actuarial gains

Includes actuarial gains and losses on defined benefits superannuation plans.
Net financial liabilities

Total liabilities less financial assets, other than equity in PNFCs and PFCs. This
measure is broader than net debt as it includes significant liabilities, other than
borrowings (for example accrued employee liabilities such as superannuation and long
service leave entitlements). For the PNFC and PFC sectors, it is equal to negative net
financial worth.
Net financial worth

Net financial worth is equal to financial assets minus liabilities. It is a broader measure
than net debt in that it incorporates provisions made (such as superannuation, but
excluding depreciation and bad debts) as well as holdings of equity. Net financial
worth includes all classes of financial assets and liabilities, only some of which are
included in net debt.
Net lending/borrowing
This is the net operating balance minus the net acquisition/(disposal) of non-financial
assets. It is also equal to transactions in the net acquisition/(disposal) of financial
assets minus the net incurrence of liabilities. It indicates the extent to which financial
resources are placed at the disposal of the rest of the economy or the utilisation of
financial resources generated by the rest of the economy. It is an indicator of the
financial impact on the rest of the economy.
Net other economic flows

The net change in the volume or value of assets and liabilities that does not result from
transactions.
Net operating balance

This is calculated as income from transactions minus expenses from transactions.
Net result from transactions net operating balance

The revenue from transactions minus expenses from transactions. It is a summary
measure of the ongoing sustainability of operations. It excludes gains and losses
resulting from changes in price levels and other changes in the volume of assets. It is
the component of the change in net worth that is due to transactions and can be
attributed directly to government policies.
180
Net worth
The net worth of the GGS, PNFC and PFC sectors are defined as assets less liabilities.
This differs from the ABS GFS definition for the PNFC and PFC sectors where net
worth is defined as assets less liabilities less shares and other contributed capital. Net
worth is an economic measure of wealth, reflecting the Australian Governments
contribution to the wealth of Australia.
Operating result
A measure of financial performance of the operations for the period. It is the net result
of items of revenue, gains and expenses (including losses) recognised for the period,
excluding those that are classified as other non-owner movements in equity.
Operating statement
The operating statement presents details of transactions in revenues, expenses, the net
acquisition of non-financial assets (net capital investment) and other economic flows
for an accounting period.
Transactions
Interactions between two units by mutual agreement or an action within a unit that is
analytically useful to treat as a transaction.
Unilaterally determined bad debts

Financial assets written off without an agreement with the debtor in cases such as
bankruptcy of the debtor.
Note 15: Audit expenses

With the exception of a small number of entities, audit services within the reporting
entity are provided by the AuditorGeneral. The cost of these services which include
performance and financial statement audits, totalled $76.6 million (2014: $75.2 million).
The audit of the CFS cost $1.1 million (2014: $0.7 million).
181
Note 16: List of Australian Government reporting entities

The following is a list of Australian Government reporting entities which have been
consolidated for the purposes of the financial report. Unless otherwise noted, all such
entities are wholly owned. The list is based on the Australian Government
Administrative Arrangement Orders in place at 30 June 2015.
Agriculture Portfolio
General Government:
Australian Fisheries Management Authority Department of Agriculture
Australian Grape and Wine Authority Fisheries Research and Development Corporation
Australian Pesticides and Veterinary Medicines Grains Research and Development Corporation
Authority Rural Industries Research and Development
Cotton Research and Development Corporation Corporation
Attorney-Generals Portfolio
General Government:
Administrative Appeals Tribunal Bundanon Trust (company limited by guarantee)
Attorney-Generals Department CrimTrac Agency
Australian Business Arts Foundation Ltd (Creative Family Court and Federal Circuit Court
Partnerships Australia) (company limited by Federal Court of Australia
guarantee) High Court of Australia
Australian Commission for Law Enforcement National Archives of Australia
Integrity National Film and Sound Archive Australia
Australia Council National Gallery of Australia
Australian Crime Commission National Library of Australia
Australian Federal Police National Museum of Australia
Australian Film, Television and Radio School National Portrait Gallery of Australia
Australian Financial Security Authority Office of the Australian Information Commissioner
Australian Human Rights Commission Office of Parliamentary Counsel
Australian Institute of Criminology Office of the Director of Public Prosecutions
Australian Law Reform Commission Old Parliament House
Australian National Maritime Museum Screen Australia
Australian Security Intelligence Organisation
Australian Transaction Reports and Analysis
Centre
Public non-financial corporations:

Australian Government Solicitor
Communications Portfolio
General Government:
Australian Broadcasting Corporation Special Broadcasting Service Corporation
Australian Communications and Media Authority Telecommunications Universal Service
Department of Communications Management Agency

Australian Postal Corporation NBN Co Ltd
182
Defence Portfolio
General Government:
AAF Company (company limited by guarantee) Defence Materiel Organisation
Army and Air Force Canteen Service Royal Australian Air Force Veterans Residences
Australian Military Forces Relief Trust Fund Trust Fund
Australian Strategic Policy Institute Ltd (company Royal Australian Air Force Welfare Recreational
limited by guarantee) Company (company limited by guarantee)
Australian War Memorial Royal Australian Air Force Welfare Trust Fund
Department of Defence Royal Australian Navy Central Canteens Board
Department of Veterans Affairs Royal Australian Navy Relief Trust Fund
Defence Housing Australia
Education and Training Portfolio

General Government:
Australian Curriculum, Assessment and Reporting Australian Research Council
Authority Australian Skills Quality Authority (National
Australian Institute of Aboriginal and Torres Strait Vocational Education and Training Regulator)
Islander Studies Department of Education and Training
Australian Institute for Teaching and School Tertiary Education Quality and Standards Agency
Leadership Ltd (company limited by guarantee)
Employment Portfolio
General Government:
Asbestos Safety and Eradication Agency Safe Work Australia
Comcare Seafarers Safety, Rehabilitation and
Department of Employment Compensation Authority (Seacare Authority)
Fair Work Commission Workplace Gender Equality Agency
Office of the Fair Work Building Industry
Inspectorate
Office of the Fair Work Ombudsman
Public financial corporations:

Coal Mining Industry (Long Service Leave
Funding) Corporation
Environment Portfolio
General Government:
Bureau of Meteorology Director of National Parks
Clean Energy Regulator Great Barrier Reef Marine Park Authority
Climate Change Authority Murray-Darling Basin Authority
Department of the Environment Sydney Harbour Federation Trust
Finance Portfolio
General Government:
Australian Electoral Commission ComSuper
Commonwealth Superannuation Corporation Department of Finance
Future Fund Management Agency

ASC Pty Ltd
183
Foreign Affairs and Trade Portfolio

General Government:
Australian Centre for International Agricultural Department of Foreign Affairs and Trade
Research Export Finance and Insurance Corporation
Australian Secret Intelligence Service (National Interest Account)
Australian Trade Commission Tourism Australia

Export Finance and Insurance Corporation
Health Portfolio
General Government:
Australian Commission on Safety and Quality in Department of Health
Health Care Food Standards Australia New Zealand
Australian Institute of Health and Welfare Independent Hospital Pricing Authority
Australian National Preventive Health Agency National Blood Authority
Australian Organ and Tissue Donation and National Health Funding Body
Transplantation Authority National Health and Medical Research Council
Australian Radiation Protection and Nuclear Safety National Health Performance Authority
Agency National Mental Health Commission
Australian Sports Anti-Doping Authority Private Health Insurance Administration Council
Australian Sports Commission Private Health Insurance Ombudsman
Australian Sports Foundation Ltd (company limited Professional Services Review Scheme
by guarantee)
Cancer Australia

ANSTO Nuclear Medicine Pty Ltd
Immigration and Border Protection Portfolio

General Government:
Department of Immigration and Border Protection Migration Review Tribunal and Refugee Review
Australian Customs and Border Protection Service Tribunal
Industry and Science Portfolio

General Government:
Australian Institute of Marine Science Department of Industry and Science
Australian Nuclear Science and Technology Geoscience Australia
Organisation IIF Investments Pty Ltd
Australian Renewable Energy Agency IP Australia
Commonwealth Scientific and Industrial Research National Offshore Petroleum Safety and
Organisation Environmental Management Authority
Infrastructure and Regional Development Portfolio

General Government:
Australian Maritime Safety Authority Infrastructure Australia
Australian Transport Safety Bureau National Capital Authority
Civil Aviation Safety Authority National Transport Commission
Department of Infrastructure and Regional
Development

Airservices Australia Moorebank Intermodal Company Ltd
Australian Rail Track Corporation Ltd
184
Prime Minister and Cabinet Portfolio

General Government:
Aboriginal Hostels Ltd (company limited by Outback Stores Pty Ltd
guarantee) Torres Strait Regional Authority
Australian National Audit Office Office of National Assessments
Australian Public Service Commission Office of the Commonwealth Ombudsman
Department of the Prime Minister and Cabinet Office of the Inspector-General of Intelligence and
Indigenous Business Australia Security
Indigenous Land Corporation Office of the Official Secretary to the
National Australia Day Council Ltd (company Governor-General
limited by guarantee)

Voyages Indigenous Tourism Australia Pty Ltd
Social Services Portfolio

General Government:
Australian Aged Care Quality Agency National Disability Insurance Scheme Launch
Australian Institute of Family Studies Transition Agency (National Disability Insurance
Department of Human Services Scheme)
Department of Social Services

Australian Hearing Services (Australian Hearing)
Treasury Portfolio
General Government:
Australian Bureau of Statistics Corporations and Markets Advisory Committee
Australian Competition and Consumer Commission Department of the Treasury
Australian Office of Financial Management Inspector-General of Taxation
Australian Prudential Regulation Authority National Competition Council
Australian Securities and Investments Commission Office of the Auditing and Assurance Standards
Australian Taxation Office Board
Clean Energy Finance Corporation Office of the Australian Accounting Standards
Commonwealth Grants Commission Board
Productivity Commission
Royal Australian Mint

Australian Reinsurance Pool Corporation Reserve Bank of Australia
Parliamentary Departments
General Government:
Department of Parliamentary Services Department of the Senate
Department of the House of Representatives Parliamentary Budget Office
185
Entity changes during 2014-15

Entities no longer consolidated
Albury-Wodonga Development Corporation (31 December 2014)
Anindilyakwa Land Council (1 July 2014)
Australian River Co Ltd (24 April 2015)
Central Land Council (1 July 2014)
General Practice Education and Training Ltd (company limited by guarantee)
(17 June 2015)
Grape and Wine Research Development Corporation (30 June 2014)
Health Workforce Australia (8 October 2014)
Low Carbon Australia Ltd (company limited by guarantee) (12 October 2014)
Medibank Private Ltd (1 December 2014)
National Water Commission (17 June 2015)
Northern Land Council (1 July 2014)
Tiwi Land Council (1 July 2014)
Wine Australia Corporation (30 June 2014)
Wreck Bay Aboriginal Community Council (1 July 2014)
Entities newly controlled/established in 2014-15

Australian Grape and Wine Authority (1 July 2014)
Infrastructure Australia (1 September 2014)
Entities with name changes

Department of Education and Training (previously the Department of Education)
Department of Industry and Science (previously the Department of Industry)
The Australian Government Organisations Register (www.finance.gov.au/resource-

management/governance/agor/) provides, in a searchable online format, information
on the function, composition, origin and other details of more than 1,100 Australian
Government bodies, including the reporting entities consolidated in the financial
report.
186

Australia Government Consolidated Financial Statements 2015

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Australia Government Consolidated Financial Statements 2015

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Commonwealth of Australia

CON SOLIDA TED FIN A N CIA L STA TEM EN TS

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Provided you have not modified or transformed Department of Finance material in

Use of the Coat of Arms

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COMMENTARY ON THE FINANCIAL STATEMENTS ................................................. 3

CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE AUSTRALIAN

SECTOR STATEMENTS .................................................................................... 45

NOTES TO THE FINANCIAL STATEMENTS .......................................................... 55

In addition, the Australian Governments net acquisition of non-financial assets

Contingent liabilities, contingent assets and risks

Final Budget Outcome

Senator the Hon Mathias Cormann

The Australian Government financial results for 2014-15 were as follows:

The Australian Governments closing net worth position was negative

DISCUSSION AND ANALYSIS

Chart 1 provides a comparison of the Australian Governments consolidated fiscal

Chart 2 provides a trend of the Australian Governments consolidated revenues and

Chart 2: Revenue and expenses

Australian Government revenue

Chart 3 shows the composition of revenue since 2007-08.

Chart 3: Composition of revenue

Chart 4: Composition of taxation revenue

Individuals and other

Table 4: Australian Government taxation revenue

Chart 5: Composition of non-taxation revenue

Table 5: Non-taxation revenue

an increase of $0.1 billion in interest income, including an increase of $0.3 billion

an increase of $0.1 billion in other revenue including:

Australian Government expenses

Chart 7: Breakdown of expenses

a decrease of $0.9 billion in subsidy expenses primarily as a result of the repeal of

depreciation and amortisation expenses increased by $0.7 billion consistent with

the current service cost of the Australian Governments unfunded superannuation

Interest (excluding superannuation interest) expenses increased by $1.2 billion

Chart 8: Total expenses by function

Mining, manufacturing and construction

Agriculture, forestry and fishing

Recreation and culture

Public order and safety

Housing and community amenities

Fuel and energy

Other economic affairs

Transport and communication

General public services

Social security and welfare

0 20 40 60 80 100 120 140

Australian Government other economic flows

Australian Government net acquisition of non-financial assets

The Australian Governments net acquisition of non-financial assets showed a decrease

Table 9: Balance sheet

Chart 9 shows the movement and composition of the Australian Governments

Chart 9: Australian Government balance sheet

Australian Government assets

Chart 10: Composition of assets

Included in the above categories are the following items:

Table 10: Australian Governments assets

an increase of $24.7 billion in investments, loans and placements. This included a

an increase of $3.6 billion in equity investments, primarily resulting from an

an increase of $3.5 billion for infrastructure, plant and equipment including an

an increase of $1.5 billion for other non-financial assets, primarily driven by an

an increase of $1.4 billion for specialist military equipment;

an increase of $0.9 billion for buildings primarily due to revaluations by Defence